<Chinese Economy at a Crossroads> ƒ- Economic Experts’ Immediate Diagnosis on China

With many of China’s major economic indices underperforming and the real-estate market falling steadily, expectations for China’s economic recovery have been cooling. Meanwhile, economists and industry experts are giving different growth forecasts and diagnoses on the economy. Some government officials are claiming that economic trends are still within expectations, while private economists are showing more pessimistic views that it will be unlikely China can achieve its 7.5% growth target.

Some economists are sounding the alert on the Chinese economy, with many predicting that the Chinese government will soon take certain economic stimulus measures. In a telephone interview with Yonhap News, CKGSB Professor Zhou Chunsheng said, “Although the government has achieved positive results by taking some progressive measures to spur economic growth, China’s economic growth trend will still be challenged this year”, adding that it would be difficult to reach the goal of 7.5% growth. However, Prof. Zhou commented that it is highly unlikely that the growth rate would fall under 7%.

Prof. Zhou gave five reasons for the economic slowdown – lack of foreign trade initiative due to increased labor costs, the real-estate bubble, local government debt, increased risk in the loan market, and imperfections in the objective economy. He added that the government may take several measures such as fine-tuning the financial policies or adjusting the bank reserve requirement rate.

Read <Chinese Economy at a Crossroads> ƒ Economic Experts’ Immediate Diagnosis on China on Yonhap News website.