China easily overcame the target mark of growth in 2009 due to impressive performance in the fourth quarter, which creates a basis for further tightening of monetary policy, and will overtake Japan by indicators, becoming the second largest economy in the world.
Between October and December, compared with last year, GDP grew by 10,7%, this figure is slightly lower than market forecasts of 10.9%, but differs sharply from a revised rate of 9.1% in third quarter . Quick quarterly growth in China for two years has boosted expectations that Beijing raise interest rates in the next few months, he can take after a series of small steps to curb the flow of credit and prevent overheating of the economy and markets.
"Obviously, month after month, growth is very significant", - said Ksing Zikyang (Xing Ziqiang), economist CICC in Beijing. "Because I think we have every chance to see rising interest rates in the first quarter."
For the whole 2009 the economy grew by 8,7%, jumping nimbly mark the official target of 8%, which was considered the minimum necessary to create new jobs and maintain social stability.
This increased the confidence of markets and customers, turning growth, is becoming more stable and comprehensive.
"Trust - is the spark inciting understanding", - said at a press briefing, the head of the National Bureau of Statistics Dzhaytang Ma (Ma Jiantang).
These data prompted economists JPMorgan and RBS to raise growth forecasts for 2010 to 10% with 9,7% and 9,5% respectively, but the expectations of policy tightening outweighed optimism about China's contribution to global recovery.
Short-term dollar rose to a 4 months after the publication of the Chinese data, as investors abandoned the risky bets. Shares in most countries of the Asia-Pacific region declined, while shares in Shanghai rose by 0,3%.
The heyday of the fourth quarter contributed to lower the data from the same period a year ago, when the export-oriented economy in China has slowed down the global financial crisis, resulting in more than 20 million migrant workers have lost their seats.
But double-digit growth rate also shows a rapid response by the Government on the decline.
4 trillion yuan ($ 585 billion) of tax incentives were complemented by unprecedented growth in lending secured by state banks, insisting that China has become the first economy recovering strongly after the credit crisis.
Warning on inflation
Indeed, banks have issued so much debt in recent years that the policy rightly focused their attention on inflation.
Bureau of Statistics, which published the data on GDP, also reported that consumer prices rose by 1.9% in December year over year, reflecting an increase from November to 0.6%.
Worried by a new explosion of credit in early January, the central bank has increased the required proportion of deposits that banks must hold in reserve and not lend, as early as this week, ordered some banks dramatically reduce lending volumes for the remainder of the month.
The central bank also raised the yield of their bonds during the past few weeks, and on Thursday pushed up the yield of three-month bills for the second time this year.
So far, China has resisted international pressure to allow the yuan to rise after 18-month pause, but everyone expects that Beijing will soften the impact on the currency in the coming months.
"Strengthening the yuan could return in March or April, although growth will be gradual, say, somewhere in the 3-5% per year", - said Ksing.
Strong exchange rate will weaken and inflation will stimulate domestic demand, thereby helping to balance the Chinese, as well as the global economy.
China takes steps to stimulate spending, which include subsidies for rural buyers of household appliances and tax breaks for fuel-efficient cars, and this measure has helped China overtake the U.S. in 2009, the largest car market in the world.
Retail sales rose 17.5% to December of the year, it accelerated from 15,8% in November compared with forecasts for 16.4%.
Industrial production growth slowed to 18,5% with 19,2%, denying market forecast 20.0% growth.
The growth of 8,7% in 2009 was below the pace of the previous year, 9,6%, but economists polled by Reuters expect vovzrascheniya growth this year by about 9.5%.
That would be enough for China to surpass Japan as the world economic rankings, making it the number 3. Goldman Sachs expects that China will eclipse the U.S. as the largest economy in the world by 2027.
Between October and December, compared with last year, GDP grew by 10,7%, this figure is slightly lower than market forecasts of 10.9%, but differs sharply from a revised rate of 9.1% in third quarter . Quick quarterly growth in China for two years has boosted expectations that Beijing raise interest rates in the next few months, he can take after a series of small steps to curb the flow of credit and prevent overheating of the economy and markets.
"Obviously, month after month, growth is very significant", - said Ksing Zikyang (Xing Ziqiang), economist CICC in Beijing. "Because I think we have every chance to see rising interest rates in the first quarter."
For the whole 2009 the economy grew by 8,7%, jumping nimbly mark the official target of 8%, which was considered the minimum necessary to create new jobs and maintain social stability.
This increased the confidence of markets and customers, turning growth, is becoming more stable and comprehensive.
"Trust - is the spark inciting understanding", - said at a press briefing, the head of the National Bureau of Statistics Dzhaytang Ma (Ma Jiantang).
These data prompted economists JPMorgan and RBS to raise growth forecasts for 2010 to 10% with 9,7% and 9,5% respectively, but the expectations of policy tightening outweighed optimism about China's contribution to global recovery.
Short-term dollar rose to a 4 months after the publication of the Chinese data, as investors abandoned the risky bets. Shares in most countries of the Asia-Pacific region declined, while shares in Shanghai rose by 0,3%.
The heyday of the fourth quarter contributed to lower the data from the same period a year ago, when the export-oriented economy in China has slowed down the global financial crisis, resulting in more than 20 million migrant workers have lost their seats.
But double-digit growth rate also shows a rapid response by the Government on the decline.
4 trillion yuan ($ 585 billion) of tax incentives were complemented by unprecedented growth in lending secured by state banks, insisting that China has become the first economy recovering strongly after the credit crisis.
Warning on inflation
Indeed, banks have issued so much debt in recent years that the policy rightly focused their attention on inflation.
Bureau of Statistics, which published the data on GDP, also reported that consumer prices rose by 1.9% in December year over year, reflecting an increase from November to 0.6%.
Worried by a new explosion of credit in early January, the central bank has increased the required proportion of deposits that banks must hold in reserve and not lend, as early as this week, ordered some banks dramatically reduce lending volumes for the remainder of the month.
The central bank also raised the yield of their bonds during the past few weeks, and on Thursday pushed up the yield of three-month bills for the second time this year.
So far, China has resisted international pressure to allow the yuan to rise after 18-month pause, but everyone expects that Beijing will soften the impact on the currency in the coming months.
"Strengthening the yuan could return in March or April, although growth will be gradual, say, somewhere in the 3-5% per year", - said Ksing.
Strong exchange rate will weaken and inflation will stimulate domestic demand, thereby helping to balance the Chinese, as well as the global economy.
China takes steps to stimulate spending, which include subsidies for rural buyers of household appliances and tax breaks for fuel-efficient cars, and this measure has helped China overtake the U.S. in 2009, the largest car market in the world.
Retail sales rose 17.5% to December of the year, it accelerated from 15,8% in November compared with forecasts for 16.4%.
Industrial production growth slowed to 18,5% with 19,2%, denying market forecast 20.0% growth.
The growth of 8,7% in 2009 was below the pace of the previous year, 9,6%, but economists polled by Reuters expect vovzrascheniya growth this year by about 9.5%.
That would be enough for China to surpass Japan as the world economic rankings, making it the number 3. Goldman Sachs expects that China will eclipse the U.S. as the largest economy in the world by 2027.
Reuters
January 21
January 21
1 comment:
nice post. thanks.
Post a Comment