China’s economic growth rate is expected to fall to about 8.5 per cent if the ongoing Euro zone debt crisis continues, a senior economist of the State Council’s policy research think-tank said, while others predicted that it may fall below 8 per cent.
China’s growth rate may fall to about 8.5 per cent if the EU crisis deteriorates into a global meltdown, Yu Bin, the Director-General of the Department of Macroeconomic Research at the Development Research Centre of the State Council, told state—run China Daily today.
His forecast for 2012 is more optimistic than those of most investment institutions, some of which have predicted that China’s economic growth might fall below 8 per cent next year, the Daily said.
“If the actions to control the ongoing Euro zone debt crisis fail, a possible new (global) debt crisis would deal a huge negative blow to the Chinese economy,” Zhang Jianping, a senior researcher at the Institute for International Economic Research under the National Development and Reform Commission, said.
Outlining the reasons for the slowdown, Yu said, “Eastern coastal cities saw obviously slower economic growth in 2011.
Meanwhile, the potential for additional investment in infrastructure continues to shrink, signalling that the potential for economic growth has started to decline.”
“China has entered the final stages of high-speed economic growth after three decades of rapid expansion,” Yu said, adding that the economy is under pressure, caused by short-term sluggish demand overlapping with a slower potential growth rate in the medium and long-term.
China’s export growth is forecast to decline to about 10 per cent in 2012 from about 20 per cent this year, Yu said.
The nation’s exports to the European Union, its biggest market, have seen a rapid slowdown since September.
Fixed asset investment growth may fall by about 4 percentage points to 20 per cent in 2012, Yu said.
The relatively high growth rate seen this year has been largely driven by the high-speed growth of the manufacturing and real estate industries, which account for about 60 per cent of fixed asset investment.
A decrease in exports by around 10 per cent will drag down investment in the manufacturing sector by 3 to 4 per cent.
However, bold stimulus measures similar to the 4 trillion yuan ($632 billion) stimulus package announced by the government in 2008 in response to the global financial crisis will not be repeated, Yu said.