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China GDP to slow to 8.9% on export slump
By Lydia Chen |
August 29, 2011, Monday
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Online Edition
Online Edition
J.P. MORGAN China has cut its forecast for China's economic growth to 8.9 percent this year as the global economic slowdown is causing an export slump.
Growth of the world's second largest economy is likely to further fall to 8.5 percent next year, Jing Ulrich, J.P. Morgan Managing Director and Chairman of Global Markets, China, said today in Shanghai.
However, China will still be the country with the strongest economic growth around the world, Ulrich stressed.
The revised forecast for China – previously set at 9 percent – is largely a result of faltering growth in the United States, the European Union and Japan, who are China's top three trade partners, Ulrich said. These three countries jointly make up half of China's exports.
Annual growth for the United States may come in at 1 percent this year while the eurozone's growth will be between 1 to 1.2 percent, according to J.P. Morgan's forecast.
Net exports, which is one of the three pillar industry of China's economy along with investment and consumption, has made a negative contribution of 0.43 percent to the country's overall economy in the first quarter. In the second quarter exports made a negative 0.1 percent contribution, compared with a record high of 18.1 percent in 2007, Ulrich said.
The poor showing of exports meant China should do more to spur domestic consumption if it intended to shield the country's growth from the slowdown of its trade partners, Ulrich noted.
Growth of the world's second largest economy is likely to further fall to 8.5 percent next year, Jing Ulrich, J.P. Morgan Managing Director and Chairman of Global Markets, China, said today in Shanghai.
However, China will still be the country with the strongest economic growth around the world, Ulrich stressed.
The revised forecast for China – previously set at 9 percent – is largely a result of faltering growth in the United States, the European Union and Japan, who are China's top three trade partners, Ulrich said. These three countries jointly make up half of China's exports.
Annual growth for the United States may come in at 1 percent this year while the eurozone's growth will be between 1 to 1.2 percent, according to J.P. Morgan's forecast.
Net exports, which is one of the three pillar industry of China's economy along with investment and consumption, has made a negative contribution of 0.43 percent to the country's overall economy in the first quarter. In the second quarter exports made a negative 0.1 percent contribution, compared with a record high of 18.1 percent in 2007, Ulrich said.
The poor showing of exports meant China should do more to spur domestic consumption if it intended to shield the country's growth from the slowdown of its trade partners, Ulrich noted.
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