[中國新聞] China's annual growth predicted to fall to 3.9% by 2025 annual, growth, China

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http://www.cbc.ca/news/business/ ... 9-by-2025-1.2806147

China's annual economic growth could be cut in half over the next decade, hurting prospects for growth among countries like Canada that sell commodities to China.

That’s the prediction made by the U.S.-based Conference Board in a report that outlines the difficulties China will have transitioning to an economy driven by domestic demand instead of by exports.

That is the stated goal of the government in its latest five-year plan.

'The full transition of China's economic growth model is likely to be a long slog'- The Conference Board

This year, the government projects growth of 7.5 per cent, already lower than the hot 14 per cent seen in 2007.

But the Conference Board predicts growth will fall to 3.9 per cent annually by 2020 to 2025 and stay at that level for some time.

China’s growth until recently has been based on massive investment in factories and real estate, but now it is moving to reduce government loans to inefficient companies and rely more on the private sector.

"China's leaders have forestalled needed structural adjustments" by rolling out stimulus measures whenever the economy starts to sputter, the report said.

• China promises more private investment, growth of 7.5%
• Slowing Chinese GDP growth worries investors

But this has resulted in debt crisis in its banks and wasteful spending that is not resulting in productivity.

"This adjustment process will necessarily be painful," the report warned. "The full transition of China's economic growth model is likely to be a long slog."

The Conference Board expects at least five years of turmoil in the Chinese economy.

For the last five years, China has been a key driver of the world economy and to Canadian exporting, because of its demand for commodities, including minerals, lumber, grain and other products from Canada.

As the world economy seems in danger of slowing, the Conference Board is warning that a Chinese slowdown will be a drag on the world.

However more moderate growth in China could give foreign companies opportunities to buy struggling Chinese firms.

The report also predicted that it means the Chinese government —which has been investigating foreign companies for allegedly anti-competitive practices — will be "more hospitable" to foreign companies that want to invest in China.

That is debatable  — some believe that China is trying to set the stage to give its companies an advantage at home with higher tariffs and antitrust probes against foreign competitors.