Posted on 07 May 2009
China GDP to expand 7%-8%
China’s economy is expected to grow 7% to 8% this year and next, and will begin to recover in 2010, influential People’s Bank of China adviser Fan Gang said yesterday.
“In 2010, with government policies starting to take effect and external markets beginning to stabilise, various kinds of domestic demand will prop up growth,” Fan told a financial conference in Shanghai.
“China’s economy will be less reliant on government policies. Corporate investment and real estate investment will recover,” he said.
Fan’s remarks echoed views from Central Bank Vice-Governor Yi Gang, who said last month that China’s economy reached a trough at the end of last year and 2009 growth would be near the government’s target of 8%.
China has announced a four trillion yuan (US$585bil) stimulus package, urged banks to speed up lending and encouraged domestic consumption to reduce the impact from a slump in exports due to the global financial crisis.
Fan expects exports will stop falling in the next few months, while China’s trade surplus will continue to grow.
“We have already seen signs of recovery. The government acted promptly to avoid boom and bust of the economy,” Fan said. “Since there has not been a big bubble in China’s economy, there should be no big crisis.”
China’s annual economic growth slowed to 6.1% in the first quarter, from 6.8% in the fourth quarter of 2008.
Several big banks have recently upgraded their forecast on China’s economy, following a string of encouraging data for the first quarter.
UBS raised China’s 2009 GDP forecast to 7.5%, citing a strong push in fiscal stimulus, rapid loan expansion and recovering overseas orders.
The Royal Bank of Scotland said on Tuesday that a growing number of indicators, from PMI to trade data, were signalling that China’s economy is poised for recovery, although questions remained about the likely strength of that recovery.
In Beijing, Wal-Mart, the world’s top retailer, said yesterday it had launched a pilot programme to open convenience stores in China, seeking to boost its presence in one of the world’s fastest growing retail markets.
Wal-Mart, better known for its mega stores and hypermarkets, opened three convenience stores in December in the south China city of Shenzhen under the programme in a low-key initiative.
