BIZCHINA> Top Biz News
|
BIZCHINA> Top Biz News
|
|
China's economy may regain growth momentum in H2 of 2009
(Xinhua)
Updated: 2008-12-11 11:48 As the risk of deflation looms large on top of weaker exports and declining private real estate investment, China's economy may continue to slow down in the quarters immediately ahead but regain growth momentum in the second half of next year, according to a Morgan Stanley report released on Wednesday.
The projection came after the country's economic indicators showed that the impacts from the global financial crisis on China's tangible economy have become much severer. The exports totaled $115 billion last month, down 2.2 percent year-on-year in the first monthly decline since June 2001, the General Administration of Customs said on Wednesday. The previous decline, a much smaller 0.6 percent, reflected slumping US demand after the tech bubble burst. The producer price index (PPI), a measure of inflation at the factory level, decelerated sharply to an annual rise of 2 percent in November. It was also slowest rise for the PPI since May 2006, which prompted worries about the fast-slowing economy and rising deflation risks. Late last month, the World Bank has revised down its forecast for China's GDP growth of next year from 9.2 percent to 7.5 percent. Wang Qing, Morgan Stanley Asia chief economist on the Chinese economy, said that three factors, namely the cooling-down in real estate investment, a massive de-stocking of raw material inputs in the immediate aftermath of the collapse of international commodity prices and the weakening external demand, had caused China's economy to slow down rather sharply. The "triple-whammy impact" however could barely maintain its full force throughout 2009, although the ravage would likely continue to be felt in the first quarter of next year, he said. "We believe that China's economic outlook for next year is best characterized as getting worse before getting better, laying the foundation for a firmer recovery in 2010." As the fiscal stimulus package came much faster this time than that during the Asia financial crisis, Morgan Stanley expected the effect to be apparent by mid-2009. Besides, the slow recovery of the G3 economies -- the United States, European Union and Japan-- after the unprecedented monetary and fiscal policy actions might have led to an improving external demand by the second half of next year and thus would contribute to a modest recovery of the Chinese economy. (For more biz stories, please visit Industries)
|
