A new report from the OECD says China's 25-year economic miracle is likely to be sustained for 'some time', adding that its booming economy should grow by 9% this year and 9.2% in 2006.
But the Paris-based think tank said the longer-term sustainability of China's economic growth would depend on strengthening the private sector and deepening reforms in capital markets and the finance and banking sectors.
In its first 'Economic Survey of China', the Organisation for Economic Cooperation and Development said the country's economic expansion 'represents one of the most sustained and rapid economic transformations seen in the world economy in the past 50 years' but key changes must occur if the miracle is to continue.
The report listed the challenges facing the country, such as rapid urbanisation, which was bringing hundreds of millions of farmers to the cities, widening income gaps, employment and social security pressures and environmental deterioration.
Besides predicting China's economic growth in 2005 and 2006, the report said the current account balance would rise to $100 billion this year and $101 billion in 2006 based on an export-driven economy largely run by private and foreign enterprises. In 2004, the current account balance was $68.7 billion.
With China's private sector now the dominant player in many industries and a bigger creator of jobs than the state, the regulatory framework still does not meet the needs of private businesses, while poorly performing state-owned companies 'are in dire need of restructuring', the OECD said.
