According to Reuter's, China's economic growth is expected to slow to about eight percent in 1998, but Beijing will not devalue its yuan currency to spur the economy, the Business Weekly said on Sunday. That forecast is well below the 8.8 percent growth estimate for 1997, which in turn was a marked slowdown from the 9.5 percent notched up in the first half of the year and the 9.7 percent the year before. China would not try to boost growth by stimulating exports through a devaluation of the yuan, Qiu said. Analysts say the recent sharp devaluations of several Southeast Asian currencies could bite into China's exports by making products from those countries cheaper than Chinese products. There has been speculation that Beijing could engineer a yuan devaluation to keep its export sector competitive.
Exports account for a big chunk of China's economic growth.
A high growth rate is no longer the prime target for China. Last September, the Communist Party endorsed a sweeping reform plan aimed at dismantling large chunks of the wheezing state sector that is one of the main drags on the economy. The reforms called for more share issues, mergers and bankruptcies. Loss-making state enterprises were 70.5 billion yuan in the red while successful firms recorded 105 billion yuan in profits in the period, Ye said. He did not give comparative figures.