Originally posted by chinadaily at 2008-12-2 11:00
Can China keep its GDP growth rate above eight percent next year? The World Bank projected the growth will be 7.5 percent. What is your opinion?

The government has initiated a 4 trillion yuan st ...

Originally posted by chinadaily at 2008-12-2 11:16
Some economists said the growth may be as low as 5.5 percent. That may be too pessimistic.

Originally posted by chinadaily at 2008-12-2 11:00
Can China keep its GDP growth rate above eight percent next year? The World Bank projected the growth will be 7.5 percent. What is your opinion?

The government has initiated a 4 trillion yuan st ...

Unexpected Drop in China’s Imports and Exports
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By REUTERS
Published: December 10, 2008

BEIJING (Reuters) — Chinese exports and imports unexpectedly fell in November from year-earlier levels, dramatically illustrating how abruptly the world’s fourth-largest economy has slowed in response to the global credit crunch.

The drop in exports was the largest since April 1999, while the decline in imports was the steepest since monthly records kept by bankers began in 1993.

Other Asian export power houses, including South Korea and Taiwan, had already reported a drop in shipments last month as the shock to confidence that followed the collapse of the investment bank Lehman Brothers in mid-September reverberated through the world economy.

But the extent of the downturn in China was startling.

Economists had expected exports to rise 15 percent and imports to be up 12 percent compared with November 2007. But the data showed exports fell 2.2 percent from a year earlier and imports dropped 17.9 percent.

“Global demand for Chinese products is vanishing,” said Gene Ma, an economist at China Economic Monitor, a Beijing consultancy. “Secondly, the credit freeze in importing countries has made it hard for Chinese exporters to sell abroad.”

Even though imports fell more sharply than exports, the trade surplus reached a high of $40.1 billion last month, eclipsing the previous record of $35.2 billion set in October, the customs administration reported.

A plunge in the price of oil and other commodities cut China’s import bill, but economists said the drop also reflected spreading weakness in home-grown demand as businesses and consumers battened down the hatches.

“It’s just a start. Exports and imports will continue to fall in the coming months, probably until next June,” Zhang Shiyuan, an analyst with Southwest Securities in Beijing, said.

The government has been unusually frank in acknowledging its worries that the economic downturn will cause unemployment to soar, jeopardizing social stability.

Export firms employ tens of millions of rural migrants. With factories closing by the thousands in southern China, many of the workers are heading home much earlier than usual for the Lunar New Year, which falls in late January.

“With few policy options with which to revive exports, Chinese authorities are understandably focusing on measures to boost domestic demand and push forward with infrastructure initiatives, in an effort to absorb some of the migrant workforce,” Jing Ulrich, head of China equities at J.P. Morgan, said in a note to clients.

The government started a stimulus plan of 4 trillion yuan or $586 billion in early November to bolster infrastructure spending over the next two years and the central bank followed that by cutting interest rates by 1.08 percentage points — four times its usual margin.

A burning question among economists is whether Beijing will go one step further and engineer a drop in the value of the yuan to give exporters more of a competitive edge in global markets.

The Chinese currency has risen sharply in value this year against a basket of currencies of its main trading partners.

In another sign that the economy has simply run into a wall, the statistics office reported earlier that wholesale price inflation collapsed to 2.0 percent in the year to November from October’s reading of 6.6 percent.

”The situation is quite severe. We are slipping into a deflationary recession risk pretty fast,” said Isaac Meng, an economist with BNP Paribas in Beijing.

Originally posted by chinadaily at 12/1/2008 10:16 PM
Some economists said the growth may be as low as 5.5 percent. That may be too pessimistic.

Originally posted by tradervic at 2008-12-10 23:20
5.5% may be very optimistic, given that the over all worldwide credit crunch still appears to be in play.  Bottom line, it is not going to be a year that most of us are going to soon forget.