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China Think Tank: 2010 GDP 9.5%; No Basis For Yuan Rise:Press

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Wednesday, July 21, 2010 - 20:48
China Think Tank: 2010 GDP 9.5%; No Basis For Yuan Rise:Press

BEIJING (MNI) - The Chinese economy will continue to slow in the second half of 2010, producing an average 9.5% GDP growth rate for the whole year, State Information Center (SIC), a think tank affiliated with the National Development and Reform Commission, has forecast.

"The economy will maintain relatively fast growth in the second half and full year gross domestic product will grow around 9.5%, making it likely to achieve the full year macro control target (of 8% growth)," the SIC said, according to a report in the official China Securities Journal Thursday.

Given that the Chinese economy grew by 11.1% y/y in the first half of the year, the SIC forecast implies a 7.9% y/y growth rate in the second half, according to MNI calculations.

The SIC also argued against any significant appreciation of the yuan exchange rate in the near future.

The Chinese yuan "does not have a solid enough foundation to appreciate", the SIC argued. Moreover, "international hot money flows need to be closely watched to prevent a yuan rise caused by speculation," it added.

The yuan has risen by just over 0.70% against dollar since June 19, when the government announced that it would allow increased flexibility in the exchange rate.

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