CBRC: China's GDP growth rate in September will exceed 8%

Although the shadow of the global financial crisis has not disappeared, China's GDP growth rate in September will exceed 8 percent, said Liu Mingkang, chairman of the China Banking Regulatory Commission (CBRC), at a luncheon party held by the Hong Kong Association of Banks on September 9. Data shows that in the first half of 2009, China's GDP grew by 7.1 percent year-on-year, and by 7.9 percent in the second quarter.

Liu pointed out that as the global financial crisis has not yet disappeared it is too early to discuss exit strategies for economic stimulus measures. The stimulus measures adopted by the Chinese mainland are different from those in U.S. and European markets because China's stimulus funds were largely invested in infrastructure construction and in accelerating industry consolidation. He added that the current pace of economic recovery is not stable, the prospects for recovery are still rough, and problem assets in the U.S. and Europe still exist in their financial systems. Moreover, the consensus reached at the G20 Summit in Pittsburgh agrees that stimulus measures should not be withdrawn at this time.

Chinese banks have performed strongly during the global financial crisis, however to avert possible risks, the CBRC still requires commercial banks to continue to improve provision coverage ratio. Reporters learned that at the end of August, the average provision coverage ratio of China's domestic banks stood at 144.5 percent. This figure should be raised to 150 percent by the end of this year. In addition, Liu said that in the first half, the return on assets (ROA) and return on equity (ROE) of China's five major commercial banks was 1.2 percent and 21.9 percent respectively, and are expected to be maintained at these levels this year.

By People's Daily Online