China’s economy expected to pick upJuly 26th, 2012 - 4:05 pm ICT by IANS
Beijing, July 26 (IANS) China’s economic growth has bottomed out and will pick up in the second half of this year on government monetary and fiscal support as well as improvements in the world economy, experts said.
There are signs that the economy is stabilizing, said Zhang Liqun, a researcher from the Development Research Centre of the State Council, or China’s cabinet, reported Xinhua.
Europe’s sovereign debt crisis is unlikely to spread further and the world economy will hold steady in the second half, allowing China to maintain a 14 percent annual growth in exports this year, Zhang said.
The projected exports growth is higher than the 9.2 percent year-on-year increase recorded in the first half of this year.
Dwindling orders from Europe and other trade partners have sapped China’s exports and, combined with a cooling property sector, slowed the country’s growth rate to 7.6 percent in the second quarter, the lowest level since the first quarter of 2009.
Zhang estimated that China’s growth will stay between 7 and 8 percent in the second half and post an annual rate of 7.5 to 8 percent.
Chen Wei, a macroeconomic analyst from China Minzu Securities, agreed that the global economy will weigh less on China in the second half as the eurozone debt woes were unlikely to deteriorate and the US economy will gradually recover.
He expected the country’s investment growth to gain pace due to monetary loosening and fiscal stimulus, while anticipating a renewed interest in the property market in the second half that will increase local government revenues and boost their funding for projects.
China’s property market has shown signs of rebounding, with more major cities seeing home prices hikes from May, according to official data. June was the first month since September 2011 that the number of cities with month-on-month price increases exceeded the number of cities that experienced drops.
China has adopted a string of pro-growth measures, including cutting interest rates and bank reserve requirement ratios, fast-tracking investment plans to spur growth and subsidizing the purchase of energy-saving household electrical appliances.
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Tags: beijing, chen wei, debt crisis, debt woes, economic growth, first quarter, fiscal stimulus, fiscal support, global economy, government revenues, investment growth, local government, major cities, property sector, second half, second quarter, sovereign debt, trade partners, world economy, xinhua