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Tuesday 13 January 2009
China Could Miss 8pc Growth Goal says PBOC Chief
Just a week before the release of macroeconomic data for 2008, People’s Bank of China Governor Zhou Xiaochuan has said the mainland could miss its target of 8 percent economic growth this year.
Just a week before the release of macroeconomic data for 2008, People’s Bank of China Governor Zhou Xiaochuan has said the mainland could miss its target of 8 percent economic growth this year.
“China is in a moderate economic slowdown and needs measures to curb any abrupt economic downturn,” Zhou said at the annual Bank for International Settlements meeting in Basel.
His comment was the first confirmation by a central bank official of Premier Wen Jiabao’s view that China needs more stimulus measures to boost the economy.
China’s 2008 fourth-quarter and full-year macroeconomic data is due out next week.
Economists expect mainland GDP growth of 9.3 percent for 2008, but their forecasts for 2009 range from only 5.5 percent to 7.5 percent.
“After the rollercoaster year in 2008, the Chinese economy is facing significant growth weakness ... We keep our forecast for real GDP growth at 6 percent year-on-year,” said Helen Qiao, economist at Goldman Sachs.
The World Bank’s most recent forecast was for 7.5 percent growth. Royal Bank of Scotland sees the economy expanding just 5 percent, which would be the weakest since 1990.
While the majority of people think 8 percent growth is a reasonable goal, it is difficult to predict, Zhou said. “We have risks on both sides.”
Data for November showed exports and imports declining for the first time in seven years. Foreign direct investment was also in negative territory, and economists expect December data to indicate further declines.
They anticipate further stimulus measures in addition to the 4 trillion yuan (HK$4.54 trillion) package launched last November.
China Banking Regulatory Commission chairman Liu Mingkang on Sunday said Beijing could tolerate an increase in debt in order to release liquidity and boost lending and investment.
Jan. 12 (Bloomberg) -- China’s economic growth may fall short of the government’s 8 percent target for creating jobs and preventing social unrest in the world’s most populous nation, two top officials said.
Meeting the target will be “exceptionally arduous,” Liu Mingkang, the chairman of the China Banking Regulatory Commission, said in Beijing today. There are downside risks to the goal, central bank governor Zhou Xiaochuan said separately in Basel, Switzerland.
Premier Wen Jiabao pledged yesterday to announce extra stimulus measures before the legislature meets in March, to add to a 4 trillion yuan ($585 billion) growth package. Waning export demand has led to protests by fired employees, an exodus of 600,000 migrant workers from the manufacturing hub of Guangdong, and an estimated urban unemployment rate of more than 9 percent.
“It’s the first official acknowledgement that even the modest 8 percent growth target may not be achievable in 2009,” said Glenn Maguire, chief Asia-Pacific economist at Societe Generale SA in Hong Kong. “The flip side is that we are likely to see a more aggressive policy response in coming months.”
China’s growth may slow to 5 percent this year, less than half of the 11.9 percent expansion in 2007, according to Royal Bank of Scotland Plc. That would be the weakest pace since 1990 and the aftermath of the Tiananmen Square crackdown.
‘Moderate’ Slowdown
The slowdown so far has been “moderate” compared with other countries and China needs “strong policy making and policy packages” to prevent a steeper decline, Zhou said in Basel, where he’s attending a meeting of the Bank for International Settlements.
The economy grew 9 percent in the third quarter of last year, the slowest pace in five years, as recessions in the U.S., Europe and Japan cut demand for the nation’s toys, clothes and electronics. That compares with the 7.6 percent expansion in India, the slowest pace since 2004.
While “most people” view China’s 8 percent target as a reasonable goal, it’s difficult to make predictions in a time of crisis, the central banker said.
“The downside risk to the Chinese economy is even worse than anticipated,” banking regulator Liu said. A transcript of his speech was obtained by Bloomberg News. Liu said last month that an expansion of 7 percent or less could trigger social instability.
Increase in Bad Debt
China will tolerate an increase in bad debt this year as part of easing rules governing bank lending to help to sustain growth, the banking regulator said.
The regulatory commission will drop its target of reducing the balance and ratio of bad loans after five years of declines, and instead aim to prevent a “massive and rapid rebound” in soured debts, Liu Mingkang said.
China’s exports fell for the first time in seven years in November, imports plunged and industrial output gained the least in almost a decade. The state-backed Chinese Academy of Social Sciences forecast 9.4 percent urban unemployment by the end of 2008, to rise in 2009 as exports and production cool.
China may face unrest this year because of a shortage of jobs for migrant workers and university graduates, Outlook Magazine, issued by the official Xinhua News Agency, reported last week. “Mass incidents” may spike, it said, using Communist Party code for riots and civil disorder.
China’s cabinet on Jan. 7 announced measures to help graduates find jobs as unemployment rises.
“Ensuring university graduates find jobs is the top employment priority in the light of the severe jobs situation due to the global economic crisis,” the State Council said after a meeting chaired by Wen.
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China Could Miss 8pc Growth Goal says PBOC Chief
Just a week before the release of macroeconomic data for 2008, People’s Bank of China Governor Zhou Xiaochuan has said the mainland could miss its target of 8 percent economic growth this year.
“China is in a moderate economic slowdown and needs measures to curb any abrupt economic downturn,” Zhou said at the annual Bank for International Settlements meeting in Basel.
His comment was the first confirmation by a central bank official of Premier Wen Jiabao’s view that China needs more stimulus measures to boost the economy.
China’s 2008 fourth-quarter and full-year macroeconomic data is due out next week.
Economists expect mainland GDP growth of 9.3 percent for 2008, but their forecasts for 2009 range from only 5.5 percent to 7.5 percent.
“After the rollercoaster year in 2008, the Chinese economy is facing significant growth weakness ... We keep our forecast for real GDP growth at 6 percent year-on-year,” said Helen Qiao, economist at Goldman Sachs.
The World Bank’s most recent forecast was for 7.5 percent growth. Royal Bank of Scotland sees the economy expanding just 5 percent, which would be the weakest since 1990.
While the majority of people think 8 percent growth is a reasonable goal, it is difficult to predict, Zhou said. “We have risks on both sides.”
Data for November showed exports and imports declining for the first time in seven years. Foreign direct investment was also in negative territory, and economists expect December data to indicate further declines.
They anticipate further stimulus measures in addition to the 4 trillion yuan (HK$4.54 trillion) package launched last November.
China Banking Regulatory Commission chairman Liu Mingkang on Sunday said Beijing could tolerate an increase in debt in order to release liquidity and boost lending and investment.
Jan. 12 (Bloomberg) -- China’s economic growth may fall short of the government’s 8 percent target for creating jobs and preventing social unrest in the world’s most populous nation, two top officials said.
Meeting the target will be “exceptionally arduous,” Liu Mingkang, the chairman of the China Banking Regulatory Commission, said in Beijing today. There are downside risks to the goal, central bank governor Zhou Xiaochuan said separately in Basel, Switzerland.
Premier Wen Jiabao pledged yesterday to announce extra stimulus measures before the legislature meets in March, to add to a 4 trillion yuan ($585 billion) growth package. Waning export demand has led to protests by fired employees, an exodus of 600,000 migrant workers from the manufacturing hub of Guangdong, and an estimated urban unemployment rate of more than 9 percent.
“It’s the first official acknowledgement that even the modest 8 percent growth target may not be achievable in 2009,” said Glenn Maguire, chief Asia-Pacific economist at Societe Generale SA in Hong Kong. “The flip side is that we are likely to see a more aggressive policy response in coming months.”
China’s growth may slow to 5 percent this year, less than half of the 11.9 percent expansion in 2007, according to Royal Bank of Scotland Plc. That would be the weakest pace since 1990 and the aftermath of the Tiananmen Square crackdown.
‘Moderate’ Slowdown
The slowdown so far has been “moderate” compared with other countries and China needs “strong policy making and policy packages” to prevent a steeper decline, Zhou said in Basel, where he’s attending a meeting of the Bank for International Settlements.
The economy grew 9 percent in the third quarter of last year, the slowest pace in five years, as recessions in the U.S., Europe and Japan cut demand for the nation’s toys, clothes and electronics. That compares with the 7.6 percent expansion in India, the slowest pace since 2004.
While “most people” view China’s 8 percent target as a reasonable goal, it’s difficult to make predictions in a time of crisis, the central banker said.
“The downside risk to the Chinese economy is even worse than anticipated,” banking regulator Liu said. A transcript of his speech was obtained by Bloomberg News. Liu said last month that an expansion of 7 percent or less could trigger social instability.
Increase in Bad Debt
China will tolerate an increase in bad debt this year as part of easing rules governing bank lending to help to sustain growth, the banking regulator said.
The regulatory commission will drop its target of reducing the balance and ratio of bad loans after five years of declines, and instead aim to prevent a “massive and rapid rebound” in soured debts, Liu Mingkang said.
China’s exports fell for the first time in seven years in November, imports plunged and industrial output gained the least in almost a decade. The state-backed Chinese Academy of Social Sciences forecast 9.4 percent urban unemployment by the end of 2008, to rise in 2009 as exports and production cool.
China may face unrest this year because of a shortage of jobs for migrant workers and university graduates, Outlook Magazine, issued by the official Xinhua News Agency, reported last week. “Mass incidents” may spike, it said, using Communist Party code for riots and civil disorder.
China’s cabinet on Jan. 7 announced measures to help graduates find jobs as unemployment rises.
“Ensuring university graduates find jobs is the top employment priority in the light of the severe jobs situation due to the global economic crisis,” the State Council said after a meeting chaired by Wen.
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