SUBSCRIBE TO OUR FREE NEWSLETTER
PUBLISHED |

China growth mostly stimulus; exports needed

China growth mostly stimulus; exports needed article image

Most of China's growth this year will be as a result of the Chinese government's stimulus package, according to the latest data from the World Bank. 'Government-influenced expenditure' will account for six percent of China's forecasted 7.2 percent growth, which has raised fears that China's growth is unsustainable, although the government still has enough money to spend even more on infrastructure, with a budget deficit of just five percent. Growth will be dependent on a pick up in exports from China. In the past decade, China's exports grew at almost 20 percent per annum and World Bank economists estimate that China’s export growth over the next 10 years could still average nine percent. Bank lending has also increased, though the World Banks says this is definitely unsustainable: "As the backlog of projects gets cleared, banks’ excess reserves come down because of all the lending, and government-related projects receive their financing, new bank lending is expected to come down later in 2009."

Tags

Leave A Comment

Spinning icon Saving your comment, please wait...
Spinning icon Saving your comment, please wait...
SUBSCRIBE TO OUR FREE NEWSLETTER