China will see the start of a new growth cycle this year, with GDP growing by 8.5 percent, so long as it remains committed to economic reform, a report by the Bank of Communications Ltd said on Tuesday.
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"Improved total factory productivity spurred by overall reform of the economic mechanism will guarantee a 7 to 8 percent growth rate for China in the next 20 years.Â
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Without such reform, it will drop to 4 percent," said Tang Jianwei, senior economist at the bank.
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He said the nation's economic growth will slow to between 5 and 6 percent if this reform is carried out in several sectors instead of the entire economy.
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The report said that, supported by an investment stimulus as the new government takes over, along with a recovery in exports and stable growth in consumption, the economy will grow faster this year than in 2012.
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"Growth rate in the first and last quarters will be relatively lower compared with the second and third quarters," it said.
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China saw gross domestic product growth of 7.8 percent in 2012, a 13-year low and down from 9.3 percent in 2011, according to data from the National Bureau of Statistics last week.
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Tang said: "The government's fiscal deficit will be broadened to 1.2 trillion yuan ($190 billion) from last year's 800 billion yuan to support economic growth."
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The report said that this year the economy might face overheating risks again, as pressure increases from inflation, rising housing prices, capital inflows and currency appreciation.
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Fixed-asset investment will increase by 23 percent, faster than last year's 20.6 percent, while new yuan loans throughout the year will range between 9 and 9.5Â trillion yuan, it said.Â