CASS forecasts China 2013 GDP to grow 8.5%

China's Academy of Social Sciences has released its report on the Chinese macro economy, looking back at the year and making forecasts for the year ahead. For 2012, it says economic growth was higher than it's initial 7.5 percent projection, and for 2013, the academy predicts we may see an expansion of nearly 8.5 percent on an annual basis.

Although the report indicates that China's economy has been clouded by weak external demand, strict property curbs and excessive production capacity throughout the year, the economy is showing signs of picking up. The government think tank says China's economy will easily be able to hit its growth target of 7.5-percent this year.

Liu Yingqiu, Dean of Graduate School, CASS, said, "Overall, the government has adopted a series of measures to stabilize growth, like cutting the interest rate and triple R. We expect China's economy to expand between 7.5 to 7.8 percent in 2012."

The report says, China's gross domestic product will gain momentum and grow at around 8.5 percent in 2013, thanks to the government's stimulating measures and the recovering global economy. But analysts warned, given the fact of China's overcapacity, a high growth target is less important than a refined structure and a healthier macro environment.

Fan Jianping, Chief economist at the State Information Center, said, "Next year, China's economic policy should focus on shaping a better macro environment to help structural adjustment. By doing so, a new growth model will be created and the old one will be phased out, and the next expansion is just around the corner."

The report also predicts China's annual consumer price index to rise by 2.6 percent at the end of 2012, and drop back to around 2.4 percent next year.