Press Conference of Center for Forecasting Science (CEFS), Chinese Academy of Sciences (CAS) on "China Economic Forecast for 2012" is held in the conference hall of Academy of Mathematics and Systems Science, CAS on January 17, 2012, which is co-organized by China Economic Net and Science Press.

It is the seventh year that CEFS releases the annual forecast on China economy.

The annual forecasts on China economy for 2012 are shown as follows:

The annual China GDP growth rate is predicted at about 8.5% in 2012, down 0.7 percentage points last year. The investment and the consumption will contribute 4.5 and 4.3 percentage points to China GDP growth rate respectively, while the net exports will contribute -0.3 percentage point. It is predicted that the growth rate will be 3.8% for the primary industry, 9.5% for the secondary industry, and 8.6% for the tertiary industry in 2012. China quarterly GDP growth rate will decline in the first two quarters and will turn to increase in the second half of 2012, varying in between 8.0% and 9.0%.

The annual China CPI of 2012 is expected to be between 3.6% and 4.0%. The highest of CPI will occur in the first quarter, followed by a decline for the rest of the year. The annual PPI and the annual PPIRM are estimated to be between 3.5% and 5.0%, and between 5.5% and 6.8%, respectively. Both PPI and PPIRM will decline in the first half of 2012 and will turn to rise afterwards.

In the context that the European debt crisis will not deteriorate, China total imports and exports is about 4.1473 trillion U.S. dollars in 2012, up 13.9% last year. Particularly, the value of China exports is about 2.14764 trillion U.S. dollars, up 13.1% last year; the value of China imports is about 2.01752 trillion U.S. dollars, up 15.7% last year; the trade surplus is about 130.12 billion U.S. dollars.

A slight increase of China grain area will occur in 2012. On the conditional that there is no severe weather, the grain output will increase 2011 by 2.5~3.5 million tons, reaching about 575 million tons. As a result, China grain production has been increasing 9 years in a row from 2004. The cotton acreage in 2012 is expected to drop by about 8% than that in 2011; the oil-bearing crops will slightly increase in terms of sown area in 2012, the yield will increase with positive weather conditions during the growing period. China annual grain consumption is expected to be about 585 million tons, with an increase of 15.4 million tons compared to 2011.

In 2012, most industries are expected to decline due to the weak economic fundamentals, domestically and globally.

The adjustment of consumption policies, as well as the weak economic fundamentals, will lead to the low demand in both the automobile and the home appliances markets. Particularly, both industries will grow at a slow rate in the first half of 2012, after which a rebound may occur if either the domestic economy recovers or new stimulus spending policies are implemented. In 2012, China automobile production and sales will be about 19.3 million and 19.7 million respectively, up 4.7% and up 6.5% last year, respectively. The growth rates of most home appliances production will decline in 2012. Specifically, television, fridge, washing machine and air conditioner production are 5.0, 5.8, 5.2 and 12 percentage points lower than that of last year, respectively. 

Against this background, the steel industry will see low profits; the prosperity index of both steel industry and none-ferrous metals industry will decline to some extent in 2012, however the decline is expected to be limited given such facts as the enhancement of the resource exploration, the development of new materials industry and the increase of affordable housing. In 2012, the yearly yield of the rolled steel is expected to be 0.97 billion tons with the year-on-year growth by 10%; the copper production will be 5.75 million tons with year-on-year growth by 11%; the aluminum production is forecasted to be 21.5 million tons with year-on-year growth by 10% and the yield of ten types of non-ferrous metal will be 37.10 million tons with year-on-year growth by 9%.

Due to such facts as the shock to domestic oil production from the Penglai oil leakage accident, the slowdown of oil demand resulted from the weak recovery of world economy, the Oil & Gas Mining industry is expected to be depressed in the first half year of 2012, and its prosperity index might decline to some extent. However, the decline is expected not to be too sharp due to the potentials of oil price increase. The coal industry prosperity index will continue to expand in the first quarter of 2012 and remain for some time due to the high demand of coal; however the expansion rate will slow down. In 2012, the raw coal production is expected to exceed 3.95 billion tons, with year-on-year growth by 8%; the crude oil production is expected to be 0.208 billion tons, with year-on-year growth by 2.2%; the natural gas production is expected to be 114 billion cubic meters, with year-on-year growth by 11.7%.

China logistics industry in 2012 will gain continuous improvement. China logistics industry will grow steadily. It is expected that the amount of China total social logistics in 2012 will reach about 190.96 trillion Yuan. Calculated at comparable price, the growth rate is 12.8%, 0.4 percentage points lower than that in 2011.

A decrease in average house prices will occur in 2012, with RMB 5024.4 Yuan per square meter, down 5.3% compared with last year. Specifically, it is expected to be down by 10.7%, 8.0%, and 3.6% in the first three quarters respectively, whereas it will be up 1% the fourth quarter. It is estimated a high housing demand and a low housing supply in 2012. Particularly, the new housing units, started and completed, as well as the real estate investment will increase at a lower rate than those of last year. The supply-demand imbalance would be adjusted by the housing supplies surplus of previous years.

On the condition of stabilized global economic fundamentals, it is estimated that a slight increase of the commodity futures prices will occur in 2012. Particularly, the CRB commodity Index is predicted to fluctuate between 550 and 710. The CRB index will rise last year by 4.3% in 2012, with an average reaching 660, which is significantly lower than that with 25% in 2011.

The WTI crude oil futures price is expected to fluctuate between 80 and 130 U.S. dollars per barrel in 2012 with an average price of 105 U.S. dollars per barrel. The gold price in 2012 is expected to fluctuate between 1600 and 2100 U.S. dollars per ounce with an average price of 1880 U.S. dollars per ounce. The LME copper futures price will vary within from 7000 to 11000 U.S. per ton in 2012, with the average price of 9000 U.S. dollars per ton, maintaining a high level throughout the year. The CBOT futures prices of wheat, corn, soybean and other major agricultural products in 2012 will follow a decreasing trend, with the average prices of 600, 570 and 1200 U.S. cents per bushel, respectively, all of which are down 9%-15% last year.

In the scenario that China's GDP growth rate is 9.3% in 2011 and 8.8% in 2012 respectively, the total energy consumption of China is expected to reach 3731 million tons of SCE in 2012. Of this, coal consumption will account for 67.9 per cent of the total consumption. Oil will be the next most important energy source, accounting for 18.4 per cent, while natural gas and hydro-power, nuclear power wind power will account for 5.6 and 8.1 per cent respectively.

Assumed China GDP growth rate in 2011 is 9.3%, and in 2012 the total primary energy consumption amount is limited to 3655, 3683, 3712 or 3741 million tons of SCE nationally, then China's GDP growth rate in 2012 will be 7.5%, 8.0%, 8.5% or 9.0% accordingly.

China's coal production is expected to be around 2465 million tons of SCE in 2012 and coal imports of China will be around 68 million tons of SCE by 2012. The production of oil in China is expected to be around 300 million tons of SCE in 2012, and 387 million tons of SCE oil is expected to be imported. Natural gas production in China will reach around 136 million tons of SCE in 2012, and China's gas imports are expected to be 73 million tons of SCE in 2012. In a word, China's energy supply and demand are expected to be in balanced in 2012, but in some areas and in sometime the energy demand may be higher than the supply.

Beside the above forecasting results, CEFS has also given forecasts and analysis for other aspects of China economy, such as the global fundamental risks, the household income, monetary policies, the stock market, capital flow, and etc. All the reports are collected into the yearly book "China Economic Forecast and Outlook for 2012", which is publishes by Science Press, Jan. 2012.