World Economic outlook - Chinese economy grew Q4 2012, China GDP data released today january 18 2013 , china economic rating : Fourth-quarter GDP data released today suggest CHINA has avoided a sharp economic slowdown - or "hard landing" - for the moment, Fitch Ratings says.
Nevertheless, risks to economic growth remain, chief among them in the near term being potential problems in the financial systems. And the economy still faces the challenge of rebalancing towards consumption away from investment.
Nevertheless, risks to economic growth remain, chief among them in the near term being potential problems in the financial systems. And the economy still faces the challenge of rebalancing towards consumption away from investment.
The figures show that the Chinese economy grew by 7.9% in Q412 from a year earlier, taking annual growth in 2012 to 7.8%, in line with our forecast, and consistent with our expectation of real GDP growth rates of 7%-8% over 2012-2014.
The Q4 reading is a pick-up from Q3's 7.4% year-on-year growth. It appears to confirm a recovery already suggested by other indicators, such as the rise in purchasing manager indices. We predict modest monetary and public-investment stimulus to support real GDP growth of about 8% in 2013.
A hard landing seems to have been avoided, but monetary easing in 2012 spurred the amount of credit in China's economy to new highs and intensified Fitch's concerns about a debt problem in China. Official data show "total social financing" grew 23% over the year, after an 8.5% contraction in 2011. Fitch estimates total credit in China's economy, including items off bank balance sheets, at about 190% of GDP by end-2012, up from 124% at end-2008.
We expect this debt problem to require sovereign resources to be resolved. This will weigh on China's local-currency sovereign credit profile and drives the Negative Outlook on the 'AA-' rating.
Even if the debt problem can be resolved without denting China's growth, the macroeconomic outlook for the medium term is more challenging. China faces the increasingly urgent task of rebalancing its economy away from investment and towards consumption.
The data show limited progress so far. Consumption contributed 4pp to annual growth in 2012, similar to the investment contribution of 3.9pp. (Net trade subtracted 0.2pp from the growth rate.) Retail sales grew a robust 14.5% in Q412 year on year by Fitch's calculation, but were outstripped by fixed asset investment growth of 20.3% for the same period.
The investment-led growth model is running into tightening constraints. The first constraint arises from the ability of the financial system to fund more capital spending in light of the existing scale of leverage and emergent pressure on bank liquidity. The second constraint is that still-higher investment, without a commensurate rise in the already-stratospheric savings rate, would see China running the risk of incurring a structural current account deficit.
In the longer term, the ability of China's economy to rebalance will also be significant for the ratings via its impact on economic growth and stability.
China macroeconomic outlook 2013, China economycondition Q4 2012, china real GDP growth2013, china economic problem 2012
Related Post:
china economic
- China overall impact on U.S. Economic growth
- Why China currency sudden fall
- China's economy is still growing at a relatively fast pace
- survey Growth in China services sector january 2013
- surveys of Chinese manufacturing activity
- China consumer price inflation target 2013
- China Economic Data Preview November 2012
- China economic growth target 2013
- HSBC Survey China Final manufacturing sector november 2012
- China annual economic growth target outlook 2013
- China confident real gdp growth of 7.5% in 2012
- China purchasing managers PMI August 2012
- Chinese Manufacturing PMI outlook august 2012
- China economic condition may 2012
- China economy inflation rate april 2012
- China economic growth outlook march 2012
- chinese inflation rate january 2012
- imf europe crisis will affect china economic growth 2012- 2013
- China Economic growth Forecast 2012-2013
- IMF Chinese GDP growth forecast 2012-2013
- Chinese housing prices outlook 2012
- China inflation rate forecast 2012
- China consumer price index (CPI) forecast 2012
- China home price in November 2011
No comments:
Post a Comment