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Subprime crisis has limited impact on China
(Xinhua)
Updated: 2008-03-04 23:03

BEIJING -- China will maintain 10.4 percent to 10.5 percent of gross domestic product (GDP) growth this year amid a minor slowdown caused by the US subprime crisis, a lawmaker said here Tuesday.

"The impact of the subprime crisis on China's economy is limited, only lowering the GDP growth rate by one percentage point," said Chen Jiagui, a deputy to the 11th National People's Congress (NPC) and vice director of Chinese Academy of Social Sciences (CASS).

He believed China's exports to US will not be affected much since most of them are low-end products and will be popular as the sluggish US economy drags down people's income.

Chen noted that the snowstorm in since January also had limited and temporary impact on China's overall economy as new demand for infrastructure construction will stimulate the economy.

He admitted that China still faces the pressure of price hikes, a major challenge for the macro-economy this year.

"The tendency of rising prices remains unchanged, a result of soaring global oil and grain prices and increasing consumers' demand caused by rising employment rate and income," he said.

He believed China should adopt a tight monetary policy and a stable financial policy to maintain the momentum of China's economy despite the minor impacts of the subprime crisis and the disastrous snowstorm.