Amid signs of a possible slowdown in world economic growth next year, Chinese and overseas experts are divided about whether China should beef up macro-economic control.

Some experts have advised the Chinese government to adopt a cautious approach to macro-economic control policies because the year 2007 may see the world economy start to slow after spiraling up for three years.

"Next year may be a turning point, in which case the biggest challenge for the Chinese authorities will be the possible overlap of slowdown trends in China and in the world," said Qu Hongbin, chief economist of the Hong Kong and Shanghai Banking Corporation (Asia).

As the impact of macro-economic control policies China adopted this year will not be fully felt until next year, a tighter curb on investment and exports may amplify the consequences of a slowdown in the world economy, he explained.

"If economic growth in the United States drops from 3.5 percent to 2 percent next year, China's export growth will fall from 30 percent to 15 percent, which will mean a decline of three percentage points in the growth of gross domestic product," Qu told a recent forum on China's economic prospects in Beijing, saying that the export slowdown would translate into less income, less expenditure and fewer jobs.

Bert Hofman, lead economist for China at the World Bank, disagreed. He said that China's exports would not be seriously impacted by a slowdown in the American economy.

In an earlier WB report, Hofman said that the growing trade surplus would aggravate the country's over-reliance on foreign trade and investment and suggested China rebalance its economy by boosting domestic consumption.

Chief economist Cao Yuanzheng of the Bank of China International agreed with projections of a slight fall in China's trade surplus. Apart from the impact of the slowdown of foreign economies, rising global energy prices and the phase-out of tax privileges for foreign-invested companies and certain export-oriented businesses will be factors.

"If China's economy starts to slow down next year, an overcapacity problem will appear the year after next, " he said.

Cao held that the best policy for the Chinese government was to maintain the current level of macro-economic control. "Don't jam your foot on the clutch or the brake, just maintain the current speed," he said.

Wang Tongsan, director of the Quantitative Economy Institute of the Chinese Academy of Social Sciences, claimed that current macro-economic control was "far from satisfactory".

"Investment and money supply are still growing rapidly while property prices remain high," he said.

Given that the previous slowdown in the early 1990s and in 1998 both stemmed from tougher macro-economic controls rather than external factors, Wang stressed the necessity of keeping alert to signs of decline.

"The key is to apply the right macro-economic adjustment policies at the right time," he said.

After China tightened control on money supply and adopted a battery of industrial policies to take the heat out of the economy, growth dropped from a blistering 11.3 percent in the second quarter to 10.7 percent for the first nine months.