The Executive Board of the IMF released annual economic report on China on August 25, which commends the Chinese government for its skillful economic management in reducing the risk of overheating.

The report says efforts by the Chinese government to rein in credit and slow investment appear to have started to bear fruit, as evidenced by the recent signs of moderating economic expansion.

China has made significant progress in structural reforms, it says. The key challenge going forward will be how to harness the strong potential for sustained economic expansion in China, while maintaining macroeconomic balance and ensuring sound, broadly-based economic development. It believes China must stick to prudent macroeconomic policies and accelerated structural reforms in key areas, including the banking sector, state enterprises, and labor markets so that a soft landing of the economy can be assured.

The report projects that China's GDP would grow by about 9 percent in 2004 and by about 7.5 percent next year. In April the IMF projected that the Chinese economy would grow by 8.5 percent in 2004 and 8 percent in 2005.

By People's Daily Online