Sunday, March 18, 2012

China economic growth outlook march 2012

World Economic outlook - China economic growth outlook march 2012 : China's top officials worry that huge injections of liquidity by U.S., U.K. and euro zone central banks to stabilise economies still struggling to overcome the aftermath of the 2008/09 financial crisis, are fuelling a speculative bubble in commodity prices.

Meanwhile, economists expect China's annual economic growth to slow to close to 8 percent in the first three months of 2012, down from 8.9 percent in the last quarter of 2011. That would be the fifth successive quarter of slower growth and leave China on track to end the year with its weakest expansion in a decade.

Premier Wen cut the official 2012 growth target to 7.5 percent earlier this month, down from the 8 percent targeted in each of the last eight years, in part to create leeway for reforms to underpin domestic demand and reduce dependence on exports and inflows of foreign capital.

Zhang said China faced many challenges in striking a balance between promoting economic growth, adjusting economic structures and controlling inflation.

Investment is still important for supporting economic growth and the government will open up the railways, the financial sector, the power industry, education services and medical care to private investment, he said.

Fixed asset investment, which accounted for 54 percent of China's economic growth in 2011, grew 21.5 percent in the first two months of 2012, slightly ahead of the 20 percent forecast.
Foreign direct investment (FDI) in February shrank from a year earlier, a fourth straight fall, with anaemic inflows from Europe an additional sign that the People's Bank of China may have to act to ensure steady money supply growth.

China drew in $7.7 billion in FDI in February, down 0.9 percent on the same month in 2011, while January and February combined saw FDI flows fall 0.56 percent from a year earlier to$17.7 billion

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