The world’s No. 2 economy is better than early forecasts have suggested. On Wednesday, the World Bank upped the ante for China GDP, saying it would grow at 8.4 percent instead of their previous forecast of 8.1 percent.
“China’s economy has been slowed by weak exports and the government’s efforts to cool down the overheating housing sector, but the recovery has set in the final months of this year,” the bank said today in its East Asia and Pacific Economic Update.
The World Bank said the challenge in the short term was to sustain growth through a soft landing, with the longer-term challenge to steer the economy toward a more sustainable path.
China’s gross domestic product grew 7.4 percent in the third quarter, the slowest pace in more than three years. Some investors and commentators have suggested that a mix of over spending on behalf of the government, and a housing bubble would eventually pull the rug out from the Chinese economy.
But that hard landing theory has not come to pass. Most large investment banks believe that while China will no longer be a double digit growth economy, it is far from crash landing.
China’s leaders have been calling for sustainable growth of around 7 percent nominally, with real growth rates of around 5 percent.
The World Bank report said that Asia remains a bright spot in the world economy, and not just China.
Developing East Asia, excluding China, is projected to grow 5.6 percent this year, up from 4.4 percent in 2011.
The rebound in Thailand following the floods in 2011, strong growth in the Philippines, and relatively mild slowdowns in Indonesia and Vietnam contributed to this recovery.
Continuing strong performances by Indonesia, Malaysia, and the Philippines will boost Developing East Asia, excluding China, to 5.7 percent in 2013 and 5.8 percent in 2014, the Bank said in a press release today.
forbes.com
“China’s economy has been slowed by weak exports and the government’s efforts to cool down the overheating housing sector, but the recovery has set in the final months of this year,” the bank said today in its East Asia and Pacific Economic Update.
The World Bank said the challenge in the short term was to sustain growth through a soft landing, with the longer-term challenge to steer the economy toward a more sustainable path.
China’s gross domestic product grew 7.4 percent in the third quarter, the slowest pace in more than three years. Some investors and commentators have suggested that a mix of over spending on behalf of the government, and a housing bubble would eventually pull the rug out from the Chinese economy.
But that hard landing theory has not come to pass. Most large investment banks believe that while China will no longer be a double digit growth economy, it is far from crash landing.
China’s leaders have been calling for sustainable growth of around 7 percent nominally, with real growth rates of around 5 percent.
The World Bank report said that Asia remains a bright spot in the world economy, and not just China.
Developing East Asia, excluding China, is projected to grow 5.6 percent this year, up from 4.4 percent in 2011.
The rebound in Thailand following the floods in 2011, strong growth in the Philippines, and relatively mild slowdowns in Indonesia and Vietnam contributed to this recovery.
Continuing strong performances by Indonesia, Malaysia, and the Philippines will boost Developing East Asia, excluding China, to 5.7 percent in 2013 and 5.8 percent in 2014, the Bank said in a press release today.
forbes.com
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