60 Chinese economists consulted by the National Bureau of Statistics agreed that China's economy was "cooling down" but would not slide into a "recession".

The NBS unveiled the results of its survey conducted at the end of June to seek economic opinions on the macro-economy during the second half of the year from 60 scholars. None of the 60 scholars thinks the economy is still overheating and most of them do not think there will be a sharp downward movement toward deflation.

As Pan Jiancheng, an official with the national center for economic climate monitoring, writes in the report of the survey, economists estimate a slowdown trend of the economy - but slim possibilities of deflation - and a prospect of soft landing while a fast growth is secured for the economy during the second half of the year.

Within a short period of 4 months, academic discussions have switched from "alert against overheating economy" to "alert against economic downturn". The consumer price index in decline for 3 months in a row has aroused concerns of some scholars over deflation which may be made possible by the inactivative consumer sentiment although there is production surge, as well as declining exports and real estate investment.

Chinese economists have expressed lowest confidence on the economy in the survey since the first quarter of last year. But they are still basically satisfied with the economic situation.

In an interview with Yi Xianrong, researcher with the Finance Institute, Chinese Academy of Social Sciences, gave his view about the macro-economy.

He has seen an abnormal development of China's economy from 2002 till 2004. "It's good that the growth rate is slowing down", he said.

He does not think there will be a deflation for the next six months as the housing prices are still high and show no signs of falling.

He does believe a faster than 20 percent upward momentum for the fixed assets investment, higher than 30 percent growth rate of exports, and rising trend of consumer goods retail sales for the second half of 2005.

According to Pan, most economists in the survey forecast downward export and investment, prices falling back at a faster speed, and declining foreign direct investment and housing prices. But they still set the economic growth outlook at 8 percent to 9 percent for 2005.

Those experts suggested moderate relaxation of the monetary policy in the second half of the year when the economy is no longer overheating. Qiu Xiaohua, Vice Director of the National Bureau of Statistics, also said in his report to the National People's Congress that the current situation called for stable macro-control policy and it was not time to adopt any new measures to tighten the economy.

Meanwhile, economists stressed "persistent macro-control efforts" on the housing sector when policies for any other sector were loosened. Nearly half of the economists in the survey found it was "difficult to judge" when the overheating property market would be cooled down.

By People's Daily Online