Fitch Ratings expects China's economy, boosted by continuous momentum on investment and foreign trade, to grow by 9.3 percent in 2005 but slow down a bit in 2006 at a pace of 8.8 percent.

This was announced by Mr. James McCormack, Senor Director and Head of Asia Pacific Sovereign Rating Group, Fitch Ratings on Nov.

Fitch Ratings does not regard a slower import growth as an indication of shrinking domestic consumption. Instead, Fitch believes this has proved that the investment-driven economic growth has improved China's productivity and international competitiveness. Last month Fitch upgraded China's sovereign rating with its long-term foreign exchange upgraded to "A" and a "stable" outlook.

Mr. McCormack attributed the economic prospect, improved banking and China's sound payment capability and net foreign assets to the upgrading. Fitch predicts that increase in exports will further swell China's forex reserve and as a result will possibly make China the first country in the world to have more than 1 trillion USD forex reserve.

Meanwhile, Fitch forecasts rising overseas investment by Chinese enterprises with the gradual liberalization process of China's capital account.

Mr. McCormack believes that the prospect of expanding forex reserve and overseas investment is apparently strengthening China's influence on the global economy and financial market.

By People's Daily Online