Fan Gang, a monetary policy adviser to China's central bank, said Saturday at the 2009 annual conference of CEO in Beijing, that the Chinese economy is experiencing a "V" shape recovery and the growth rate may reach 8 percent both this year and next year. 

On the same day, Yao Jingyuan, chief economist with the National Bureau of Statistics, made similar remarks at a forum in Shanghai with some cautions.  He said China's economy will be able to achieve the 8 percent growth of gross domestic product (GDP) this year set by the central government, although there are still difficulties ahead.

Fan predicted that the real estate investment will increase by around 30 percent in 2010, which will add one percentage point to economic growth.  Corporate investment is expected to grow prominently next year and as the global trade is warming up, Chinese export, which still enjoys the cost advantage, will recover.

"After the economy is back to normal in 2010, the government will adjust the macro-economic policy. But before that happens, the current stimulus policy should stay to sustain the recovery," he said.

Yao said the global economic downturn did not change the fundamentals of the country's economic development, buoyed by the ongoing industrialization, urbanization and marketization.  However, he warned of "blind optimism" toward what has been achieved, adding the economic recovery is not on a solid footing yet and there are still many uncertainties ahead.

He also downplayed possibilities of inflation in China in short term, at least within this year as demand fell short of supply in the country because of overcapacity. "Less demand will prevent prices from rising," he said.

In the long run, however, if China's central bank maintains the modestly loose monetary policy for too long, the risk of future high inflation will level off.  Given the recent run-up of real estate prices and stock market indexes, people have already concerned about the creation of new bubble in the economy.