News Room - Business/Economics

Posted on 10 Jul 2009

China’s economy bottomed out, says think-tank

China will expand by about 8% this year, a leading think-tank said yesterday, the latest in a series of broadly bullish reports reflecting the growing momentum of the world’s third largest economy.

 

The State Information Centre, which reports to the National Development and Reform Commission, China’s top economic planning agency, said it was premature to declare victory after a deep downturn triggered by a collapse in global demand.

 

“The Chinese economy has successfully touched bottom and has started to rebound, but this does not mean a recovery trend is assured,” the research outfit said in a report carried in the official China Securities Journal.

 

But the centre pointedly said the economy did not need further stimulus on top of the government’s four trillion yuan (US$585bil) spending plan or the help of lower borrowing costs. “In a view of preventing inflation in the long term and controlling inflationary risks, there should be no interest rate cuts this year,” it said.

 

The World Bank, the Organisation for Economic Co-operation and Development and a clutch of banks have recently upgraded their forecasts as evidence mounts that massive fiscal and monetary stimulus is likely to lead to full-year growth close to the government’s 8% target.

 

Indeed, the official Xinhua news agency cited unidentified statistics officials as saying gross domestic product growth was already “close to 8%” in the second quarter.

 

The figures are due on July 16. A Reuters poll points to growth of 7.5% from a year earlier.