China 2001 GDP growth forecast 7.3 pct; 7.5 pct in 2002: ADB

HONG KONG (AFX-ASIA) - China's economy is forecast to grow by 7.3 pct in 2001 and 7.5 pct in 2002, the official Xinhua news agency said, citing an Asian Development Outlook (ADO) released by the Asian Development Bank (ADB).	    "Three consecutive years of expansionary fiscal and monetary policy have helped China's economy escape the worst effects of contagion from the Asian financial crisis," according to the ADO. 	    During the period, the country has maintained a stable exchange rate and achieved robust growth, it said, but added that the current challenge for the country is to maintain high growth rates in a less expansionary fiscal and monetary environment. 	    "China's economy maintained a hefty growth of 8.1 pct in the first quarter. China saw a fast growth of farmers' incomes, an acceleration of industrial production and a surge in the fiscal revenue," said Tang Min, chief economist with ADB.	    "All these growth figures were even better than we had expected," he added.	    But the growth is likely to slow down in the next three quarters due to the global economic slowdown, oil price hikes and reduced gains from reforms of Chinese state-owned enterprises.	    This should, however, be mitigated by wage hikes, which should stimulate domestic consumption and so contribute significantly to GDP growth.	    The ADO's GDP projections for this year and 2002 represent an easing off from the 8 pct achieved in 2000.	    "Domestic consumption will remain strong. But rising oil prices will push up production costs, and food prices could also rise slightly in the first half of 2001 after a fall in grain production in the second half of 2000," according to the report.	    With a pickup in domestic consumption and economic growth, the deflationary trend of 2000 will be reversed, the report said.	    Inflation is likely to reach 22.5 pct in 2001-2002, it added. 

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