SHANGHAI — China should hit its gross domestic product growth target of 7.5 percent this year, the president of the World Bank, Jim Yong Kim, said Sunday.
But he warned that rising interest rates in emerging markets, in response to reports that the United States is preparing to scale back its buying of government bonds, show that significant risk remains.
“The rise in interest rates as a result of the announcement of the tapering” of bond buying has exposed weaknesses in the economies of emerging markets, he said. “Our message is very strong to those emerging markets: Think about those weaknesses and begin to move.”
Several investment banks upgraded near-term forecasts for China’s growth after a run of strong data for August, including factory output and exports, and many now have forecasts of full-year growth above the government’s official target rate of 7.5 percent.
UBS, Deutsche Bank, China International Capital Corporation and Nomura were among the banks that upgraded their growth forecasts for 2013 after the recent data release, and now all have the rate at 7.6 percent or higher.
Mr. Kim was in Shanghai as part of a four-day tour focusing on expanding collaboration with China on climate change.
Power consumption in China, the world’s top energy user, is expected to grow at a rate of more than 9 percent this year, faster than the 5.5 percent rate in 2012, the State Electricity Regulatory Commission said in January.
Some of that energy consumption is driven by inefficiently designed and poorly insulated buildings.
Meanwhile, the state-run media on Sunday said that China would invest 80 billion renminbi, or $13 billion, in oil and natural gas exploration in 2013, as it tried to bolster energy supplies and reduce its dependence on energy imports.
Oil and natural gas investment in China rose to 67.3 billion renminbi in 2011 from 19 billion renminbi in 2002, Xinhua, the state-run news agency, said, citing Ministry of Land and Resources figures.
More than five billion tons of petroleum reserves and 2.6 trillion cubic meters of natural gas were discovered between 2008 and 2011, Xinhua said.
China has promised to cut its growing dependence on overseas oil and natural gas supplies.
Still, some analysts expect China to overtake the United States as the world’s biggest importer of crude oil as soon as 2017.
Much of the oil comes from the Middle East and Africa and is transported via vulnerable sea lanes.
Natural gas imports are important to China because domestic production is not sufficient to meet growing demand. Imported gas is delivered via pipeline from Central Asia and by ship from, among other countries, Australia, Indonesia and Qatar.
China bought 42.5 billion cubic meters of gas from overseas last year. That was up more than 30 percent compared with 2011 and a nearly tenfold increase from 2007.
Article source: http://www.nytimes.com/2013/09/16/business/global/world-bank-says-china-will-reach-gdp-target-for-year.html?partner=rss&emc=rss