Economy predicted to grow in 2010

• Source: Global Times
• [00:10 December 07 2009]
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By Wang Xinyuan

Economists speaking at the 8th China Entrepreneur Summit held Saturday in Beijing predicted China would see economic growth and a bullish stock market next year, though they warned of potential market bubbles.

Next year's situation will be mixed with certainties and also uncertainties, said Gong Fangxiong, vice chairman and chief economist of JP Morgan.

The first certainty is that the world economy is in a synchronous recovery from the once-in-a-life time global financial crisis, Gong said.

"Next year, China's economy will be better off than this year," he said, predicting China's export rate will go from a 15 percent shrinkage to a 10 percent growth.

Gong also expects profit margins at non- State-owned companies to improve, and subsequently boost the domestic economy. Privately-owned businesses will be a driving force in the economy next year, he said.

The current bullish market is a sign of the global economic recovery, Gong said. Stocks are rebounding as the market corrects the over-selling that occurred during and after the crisis, he said.

However, Gong noted that uncertainties remain over how governments will pull back from interven-tion in the markets, as well as how they will react to fears of inflation caused by liberal monetary policies. Despite that, Gong expects the stock market to continue its upward trend.

Earlier this year, stock prices at some companies listed in Hong Kong were as low as 20-30 percent of their book value, due to weak investor confidence. The prices have since tripled or quintupled.