Australia Market Wrap
China Economic Growth 9% is achievable - say Chinese Authorities
China's stimulus plans are aimed to guarantee at least 9 percent economic growth over the next two years, according to a senior State Council researcher.
"The huge new spending initiative can help achieve that," said Li Jianwei, an economist with the State Council's Development Research Center, a think-tank under the nation's Cabinet. Li said this target could be achieved if the central government's new spending tops 300 billion yuan ($43.92 billion) next year.
In fact, "the stimulus package will likely involve around 1.1 trillion yuan in central government spending, an official close to the nation's top decision-makers," said today.
Li said China's slowing economy would recover in the middle of next year as a result of the stimulus package.
The policy goal is higher than the forecast made by International Monetary Fund (IMF), which last Friday said China's economic growth rate would slow to 8.5 percent from this year's estimate of 9.7 percent. The IMF's 9.7 percent forecast is lower than China's annual average of 9.8 percent growth achieved over the past three decades.
Zhang Xiaojing, a senior economist at the Chinese Academy of Social Sciences, said the stimulus package could have an "immediate effect" on the economy by the end of this year.
Zhang expected year-on-year economic growth of less than 9 percent in the final quarter of this year and estimated that China's GDP growth would be higher than the IMF's estimate of 8.5 percent in 2009.
"Because of the huge government spending, this quarter's real investment can be as high as that of last year," said Zhang, who heads a macroeconomic research team at the academy.
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