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| China's FIRST McDonald's (Photo credit: flickr.Marcus) |
Growth may slow for a ninth straight period to below 7 percent in the first quarter, Yuan Gangming, an economist with the Chinese Academy of Social Sciences, said in an interview Sept. 19 in Beijing. Yuan, who formerly headed CASS’s Office of Macroeconomic Research in the Institute of Economics, forecast 7.4 percent expansion in the third quarter and 7.2 percent in the last period of the year. The slowdown may pressure new leaders of the Communist Party, set to be named this year in a once-a-decade power handover, to step up stimulus efforts. A report yesterday showed China’s manufacturing may contract for an 11th month, and Yuan said the central bank has been too focused on controlling inflation at the expense of growth.
“The slowdown will definitely extend into the first quarter of next year,” said Yuan, 58, who advises the government without being directly involved in policy making. “That will provide a good starting point for the new generation of leadership to make a turnaround, because things can’t get worse.”
The Shanghai Composite Index rose 0.5 percent as of 11:14 a.m. local time, paring the benchmark’s steepest weekly drop since October.
Stimulus Package
With the 2008 crisis, China enacted a 4 trillion yuan ($586 billion at the time) stimulus and opened up bank lending to revive expansion. Year-over-year growth, after decelerating for seven quarters, bottomed at 6.2 percent in the first quarter of 2009 and accelerated to 11.9 percent a year later. ... Continue to read.
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