Uncertainty looms amid slow recovery

China will face a complicated and uncertain situation abroad next year amid expectations that the global economy will grow slowly, according to the conclusions of an annual economic meeting.

The two-day Central Economic Work Conference, which ended on Sunday, warned those in attendance about the increasing dangers of protectionism and the pressures that could arise from potential inflation and asset bubbles.

"The world economy has changed from the fast development period before the crisis to a period of deep transformation," said a statement issued after the meeting.

A worker at a construction site for a railway station project in Ningbo, Zhejiang province, on Dec 6. [HU XUEJUN / FOR CHINA DAILY]

Economists also warned that the largest uncertainties for the Chinese economy next year may come from outside, as the European debt crisis lingers and the US economic recovery remains sluggish.

Weaker demand from abroad has hit Chinese exports this year.

In November, the country's exports increased by only 2.9 percent year-on-year, down sharply from 11.6 percent in October.

Total foreign trade expanded only 1.5 percent in the month, making it effectively impossible to meet the country's goal of seeing a 10 percent increase for the full year.

Although China's manufacturing activity hit a 14-month high in December, a sub-index tracking new export orders was one of the few such gauges that showed a contraction, falling in line with economists' expectations that the country's exports will remain lackluster in December and into 2013.

The export-driven growth model will gradually lose its advantages, helping the Chinese economy rebalance, said Huang Mengfu, honorary chairman of the All-China Federation of Industry and Commerce.

"To strengthen international cooperation and improve internationalization will be the chief way of solving the global crisis," Huang said at a forum in Sanya, Hainan province, on Sunday.

Wang Jianxi, executive vice-president and chief risk officer at China Investment Corp, expressed optimism about Europe's prospects for economic recovery, an outcome that would help China achieve stable growth in the coming year.

"It is possible that the EU will still have room for economic growth because of its relatively advanced capacity for development," Wang said.

 

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