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The Chinese macro economy is unlikely to witness deflation in the next two years, according to a recent report from the China International Capital Corporation.
Both the investment and consumption will continue to accelerate because of the loosened monetary policy and lowered energy price, the report says, predicting a 9.2 percent growth of Chinese GDP (gross domestic product) this year.
In the next two years, the inflation pressure will still exist and deflation in a real sense will not occur in China, it says.
Against the backdrop of a slowed global economy, Chinese export growth will slow down, while its investment rise will maintain high speed, it says.
The oversupply problem in some domestic industries will not offset all price increases, and the government will keep the grain price at a high position so as to avoid deflation and safeguard farmers' interests, according to the report.
(Xinhua News Agency November 24, 2005)
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