How far is China away from the crisis?
- Source: Xinhua
- [08:29 April 19 2009]
- Comments
BOAO, Hainan, April 18 (Xinhua) -- Much has been talked about signs of recovery in Chinese economy, but little is certain about long-awaited rebound.
Discussing the latest development of Chinese economy at the Boao Forum for Asia (BFA), worldwide officials, business executives and professionals remained prudent about China's 8-percent gross domestic product (GDP) target in 2009, but mentioned some favorable changes in the country's economy.
Bob Hawke, former prime minister of Australia, forecast China's GDP growth between 7 percent to 8 percent. In the meantime, he believed a reversal had come.
"The four-trillion-yuan stimulus (package) is now beginning to work, and China's economy ... has reached the bottom and started to come up now," Hawke told Xinhua at the forum.
Increasing stress of sluggish exports, dampened employment and shrinking corporate profits have pulled down the Chinese economy to a growth of 6.8 percent in the fourth quarter last year.
A favorable trend might be forming in the first quarter of this year. Ding Lei, president of Shanghai General Motors Corporation Ltd., observed increasing domestic demand for motor vehicles.
"Our automobile exports remain low, but auto sales gained 12.9 percent in the first quarter compared with the fourth quarter last year," Ding said.
"China's policy package to boost automobile industry has effectively activated domestic market, and boosted the confidence of companies," Ding said.
John Cleland, chief executive officer of WestNet Infrastructure Group that has resources products trade with China, also noticed "some increase in demand".
"It's very hard to say, but there are signs of recovery of (China's demand for resources products)," he told Xinhua.
"Stockpiles of iron ore and steel in China have been reducing, so hopefully some projects that were put on hold have come back in the line," he said.
"China will come through (the crisis) quickly. Resource demand will recover. The demand for iron ore and basic commodities will recover quicker than consumer economies," he said.
Stable growth can also be expected in infrastructure. As China builds its nationwide mobile network, considerable and stable job opportunities can be created, said Per-Olof Bjork, general manager of Greater China Affairs of Ericsson Group Headquarters.
However, the changes are mainly felt in industries covered in the government's stimulus package, and China might need to go through a more painstaking path to ensure healthy and stable economic growth.
Chinese economy has shown more optimistic signals in the first quarter, but there are many uncertainties, said Chris Morley, managing director of Nielson China.