Is the pessimism about the Chinese economy warranted?
Guest Author: Liqing Zhang, Central University of Finance and Economics, Beijing
The prospects for China’s growth in 2009 have become a very controversial issue in the context of the unfolding global financial crisis. In the World Economic Outlook Update, released by IMF on January 28, China’s growth rate in 2009 has been revised sharply downwards to 6.7 per cent from the previous estimate of 9.3 per cent released last October. By contrast, the estimates by some investment banks, such as Nomura International (HK) Limited, believe that China should be able to maintain a growth rate of 8 per cent or even higher.
We take an optimistic stance in our prediction for several reasons.