TO THE POINT: The Asian Development Bank sees bullish prospects for the Chinese economy, though inactivity is building in the export and investment fields. China reaps a bumper harvest with grain output totaling 546.41 million tons in 2010 despite numerous natural disasters throughout the year. The Chinese Academy of Social Sciences has issued a note of caution about frothy house prices across the nation. Two Chinese Internet companies, Youku and Dangdang, have staged successful debuts on the New York Stock Exchange. China boasts the third largest number of dollar millionaires in the world.

By HU YUE

Brighter Outlook

The Asian Development Bank (ADB) has upgraded its forecast for China's economic growth this year to 10.1 percent from its previous prediction of 9.6 percent.

Growth in China is beginning to ease, but signs show the economy is shifting toward more sustainable growth from its earlier torrid pace, said the bank in a recent report.

"Rapid export growth is expected to slow, consistent with the weaker external environment. Fixed-asset investment is also moderating with measures to cool the property sector expected to continue to restrain real estate investment," said the ADB report. "Still, private consumption, proxied by retail sales, remains strong."

China's faster-than-expected expansion will help emerging East Asia grow 8.8 percent this year, up from an original estimate of 8.4 percent, said ADB.

"With the V-shaped recovery in hand, many emerging East Asian economies now face the challenge of managing strong growth and capital flows," said Iwan Azis, head of ADB's regional economic integration office. "Continued robust growth in many emerging East Asia economies suggests authorities are on track in normalizing macroeconomic policy."

Mitigating the negative effects of surging capital flows will require an appropriate mix of sound macroeconomic management, flexible exchange rates, resilient financial systems, and—in some cases—temporary and targeted capital control, he said.

Bumper Harvest

China's grain output, including rice, wheat and corn, climbed a modest 2.9 percent year on year to 546.41 million tons in 2010, the seventh consecutive year of growth, said the National Bureau of Statistics (NBS).

The result was based on a survey covering 31 provincial-level regions across the country. The acreage planted for grain expanded by around 886,000 hectares to 110 million hectares this year.

Earlier this year, a prolonged drought ravaged southwest China, drying up farmland and leaving people in desperate need of drinking water.

Among the 31 regions, 11 suffered a decline in annual grain output. Southwest China's Guangxi Zhuang Autonomous Region, Yunnan and Guizhou provinces yielded a combined 40.48 million tons of grain, dropping 3.8 percent. But a bountiful harvest in northeast China and the Inner Mongolia Autonomous Region have made up for the loss, said Ding Shengjun, a senior researcher at the State Administration of Grain.

Meanwhile, the policymakers have also spared no effort to prop up the agricultural sector. The Chinese Government this year distributed 15.5 billion yuan ($2.3 billion) in subsidies for farmers to purchase agricultural machinery, compared with 70 million yuan ($10.4 million) in 2004.

However, the country's long-term grain safety remains at stake due to an expanding population and growing living standards, said Zheng Fengtian, a professor at the Renmin University of China. The country's limited cultivated land, scarce water and relatively weak agricultural technologies have also cast a shadow over its food sustainability, he said.

Boom or Bust?

Real estate bubbles are increasing in size across China, putting the health of the economy at stake, warned the Chinese Academy of Social Sciences (CASS), which released the 2011 Greenbook on Housing Market on December 8.