September 12, 2006	Tuesday	Sha'aban 18, 1427

WASHINGTON, Sept 11: China’s economic growth could easily top 10 per cent this year if Beijing fails to rein in the expansion, the IMF said on Monday while warning of a possible “boom-bust cycle.”

The International Monetary Fund, in its annual assessment of the Chinese economy, said meanwhile that many of its analysts consider it “appropriate” for Beijing to stick with a policy of promoting “gradual and controlled” exchange rate movements.

The IMF report said that despite some calls for an acceleration of exchange rate flexibility, many IMF officials share Beijing's concern that such a move could have “an adverse impact on macroeconomic stability.”

IMF directors “commended the authorities for sustaining high economic growth and noted that China’s prospects for the future remain favourable, provided that the risks and challenges faced by the country are addressed.”

The report also “endorsed the government’s medium-term economic reform strategy, particularly the need to rebalance the economy away from heavy dependence on investment and exports for growth towards consumption.”

IMF staff are projecting economic growth in China to remain “around 10 per cent” in 2006, but only if authorities take steps to check investment.—AFP