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Foreign media and organizations optimistic about Chinese economy
Date:2015-10-22  Source:Xinhua

Recently, economists at Deutsche Bank said markets have got China all wrong. They forecast China’s GDP to grow at 7 percent for the third quarter, 7.2 percent for the fourth, and overall yearly growth to remain at 7 percent, which happens to coincide with the “around 7 percent” target Premier Li Keqiang had put forward. In the meantime, some foreign media and organizations also said the Chinese economy is still generating new drivers and the policy regulation and economic data are “under control”.

Following are some of the opinions:

Foreign media and experts optimistic about China’s economic prospects 

BofA Merrill Lynch Fund Manager Survey for October finds that the number of investors who expect the Chinese economy to slow down has decreased from September. The Shanghai Composite Index has climbed 3 percent over the past month, lifting investors’ confidence in China.

The International Monetary Fund has left its China predictions unchanged at 6.8 percent for this year and 6.3 percent for 2016. The fund said the transition that the Chinese economy is undergoing, from an export-led growth to a model increasingly driven by consumption and services, is “essential”.

According to the Economist business weekly magazine, China has long pursued an industrial policy of “indigenous innovation”, and it is spending 2 percent of its GDP on R&D. And if China is becoming a lot more innovative, the private sector can take much of the credit.

Also, it said, China’s booming middle class is creating the world’s most dynamic consumer market and demanding better services.

According to the magazine, a study published by the Bank of Finland shows that Chinese investments in the EU went from almost nothing in 2004 to 14 billion euros ($18 billion) in 2014. Chinese firms tend to look for new markets and acquire brands, technologies and knowledge there.

French bank Credit Agricole said in its analysis that there was “no reason for panic” over the Chinese economy.

“While we acknowledge the difficulties of rebalancing the Chinese economy, our best case scenario sees a soft landing,” Credit Agricole said.

The bank said it was confident about China, first because the Chinese government still has ample leeway to support the economic momentum if required. Second, the services sector is doing much better than the manufacturing sector in China.

Credit Agricole pointed out that this did matter, considering the services sector currently accounts for almost 50 percent of China’s GDP.

Nicholas R. Lardy, a senior fellow at the Peterson Institute for International Economics, also said that China is not heading for a hard landing, and that services, not industry, are driving China’s growth.

Paul Sheard, chief global economist for Standard & Poor’s Rating Services, said that China must continue to reform its economy and “change the rules of the game to rebalance the economy from investment to consumption”.

According to Ian Bremmer, president of Eurasia Group, fears about the stability of China’s economy are exaggerated.

China is not headed for a “hard landing” anytime soon. The state’s ability to boost bank lending and invest large sums in important infrastructure projects across a broad range of strategically important economic sectors suggests that China will come close to this year’s growth target of “about 7 percent”, he wrote.

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