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China's economy to take a favorable turn in six months |
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16:17, April 27, 2009 |
According to a confidence survey on dozens of Chinese economists done by China Economic Monitoring & Analysis Centre under National Bureau of Statistics, the economist confidence index in the first quarter this year stands at 3.97 points, up 0.16 and 1.54 points over the third and fourth quarters last year, putting an end to the economic decline that began in early 2008.
As the Chinese economy starts to rebound, economists' confidence in China's economic growth also takes off.
Economists point out that current domestic economy features four characteristics:
Overseas demand for Chinese commodities will continue to decline. Seventy seven percent of economists hold that the export volume in next six months will slow down and 80 percent of them believe trade surplus is about to decrease. Additionally, 71 percent of economists note the growth of foreign direct investment in the second quarter of this year is expected to drop.
Investment and money credit will maintain rapid growth. Total investment in fixed assets in the first quarter this year has grown by 28.8 percent, a growth rate of 4.2 percent over the same period last year. Seventy eight percent of economists believe the current growth rate of investment in fixed assets, which is 7 percent higher than that in the fourth quarter last year, is reasonable. As for the rapid growth of money credit at the beginning of this year, 58 percent of economists believe current money credit growth at 10 percent higher than that in the fourth quarter last year, is normal, against 33 percent of them holding that the growth is too fast.
The problem of inadequate consumption demand remains unsolved. Some 58 percent of economists believe current consumption demand is inadequate and nearly 61 percent of economists hold that consumption demand in the next six months will remain unchanged.
There is little possibility for deflation in consideration to the rapid growth of money credit and the disappearance of the tail-raising factor. According to the survey, 63 percent of economists forecast the CPI in 2009 will stand between 0 to 2 percent, followed by 12 percent of them who think negative growth is likely to occur; while 25 percent believe it will be higher than two percent.
Further economic development in China depends on the global economic trend. The survey shows 34 percent of economists hold that the global financial crisis will continue to deteriorate, followed by 32 percent of them who believe global economy will maintain a status quo. Over 60 percent of economists, 23 percent more than that in the fourth quarter last year, hold that the world economy will bottom out at the end of 2010 and then recover; while 37 percent of them hold that the global economy will not rebound until the end of 2011 against three percent of them who believe the world economy will recover within this year.
It takes time for economy to bottom out and recover. The survey shows 71 percent of economists hold that China's economy will recover in 2009, and most of them believe it will be a gradual process for China's economy to rebound. According to them, China's economic recovery will follow a U-shaped growth pattern.
Economists are fully confident about achieving eight percent growth this year. The survey shows three quarters of economists predict that GDP growth this year will stand between seven to eight percent.
Economists put forward suggestions to offset the negative impact of global financial slowdown: sticking to flexible monetary and fiscal policies; laying great importance to the use and supervision of capital; carrying out appropriate measures to create employment; paying close attention to the implementation of revitalizing policies, particularly those that could boost consumption confidence among urban and rural citizens.
By People's Daily Online
http://paper.people.com.cn/rmrb/html/2009-04/27/content_240998.htm
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