Europe debt crisis to have limited impact on China

0 CommentsPrint E-mail China Daily, May 27, 2010
Adjust font size:

The contagion from the European sovereign debt crisis is expected to have a limited impact on China, and the real risk lies in its ripple effect on the United States that might drive down the nation's growth momentum as its exports to developed countries wither, senior economists at Citigroup said on Wednesday.

"On the financial front, China has a very high level of reserves to withstand volatility in capital flows and the exposure of European banks in the country is very limited," said Shen Minggao, head of China research at Citigroup.

"But China's exports might face serious tests, as the debt crisis in the eurozone is at risk of spilling over to the US, another big trade partner for China," Shen said. Europe is now China's largest trade partner and export destination, accounting for 20 percent of the country's total exports.

In order to safeguard the euro, the European Central Bank pledged earlier this month to give $670 billion in loans and loan guarantees to any eurozone country needing funds, plus about $322 billion from the International Monetary Fund.

But economists said the European situation is far from stable. "Even if the liquidity problem is solved, the market will turn its attention to countries such as Spain, Portugal and Italy, which are in bad shape fiscally, but are not facing the obvious sovereign insolvency problem that Greece does face," said Willem Buiter, chief economist of Citigroup.

Economists at Citigroup also agreed that the European sovereign debt crisis, which has added an element of uncertainty to the global economic recovery, would delay other countries' exit from stimulus measures.

This situation is particularly the case in China, which has seen clear signs of economic overheating domestically, but the policymakers are reluctant to adopt heavy-duty weapons to cool the economy amid concerns over the European crisis and a sharp slowdown in the domestic economy.

The Chinese economy grew 11.9 percent in the first quarter, while the consumer price index rose to 2.8 percent in April, the highest in 18 months.

"The European situation complicated China's policymaking," Shen said. He expected that China would resort to interest rate hikes if consumer inflation climbs to over 4 percent, or the Federal Reserve hikes rate earlier than expected.

Citigroup economists delayed their rate hike forecast for the Fed to the second quarter of next year, and expect China to raise its interest rate once or twice this year to ease inflationary pressure.

"In terms of rate hikes, the US is less keen to move early, as European demand for US services is weakening and the appreciation of the dollar has already tightened the financial condition in the country," Buiter said.

Print E-mail Bookmark and Share

Go to Forum >>0 Comments

No comments.

Add your comments...

  • User Name Required
  • Your Comment
  • Racist, abusive and off-topic comments may be removed by the moderator.
Send your storiesGet more from China.org.cnMobileRSSNewsletter
主站蜘蛛池模板: 一根巨茎走天下小说| 免费人妻精品一区二区三区| www.激情小说.com| 欧美xxxx18动漫| 台湾三级香港三级经典三在线| 777奇米视频| 成年在线网站免费观看无广告| 亚洲成aⅴ人片在线观| 美女张开腿让男人桶爽动漫视频| 国产精品区免费视频| 两性色午夜视频免费播放| 欧美伊人久久大香线蕉在观| 又大又紧又粉嫩18p少妇| 波多野结衣69| 性短视频在线观看免费不卡流畅| 亚洲youjizz| 真实男女动态无遮挡图| 国产妇女乱一性一交| 99久久婷婷国产综合亚洲| 日本xxxx色视频在线播放| 亚洲熟妇少妇任你躁在线观看| 色噜噜人体337p人体| 国产精品国三级国产aⅴ| 一级片一级毛片| 最近2019中文字幕mv免费看| 免费中韩高清无专码区2021| 香蕉尹人在线观看免费下载| 国产高清在线精品一区二区三区| 中文字幕在线免费看| 樱桃视频影院在线播放| 伊人久久大香线蕉无码| 青青草视频ios| 国产精品真实对白精彩久久| 一边摸一边桶一边脱免费视频| 最近中文字幕高清免费大全8 | 国产三级一区二区三区| 182tv精品视频在线播放| 女人扒下裤让男人桶到爽| 久久九九久精品国产| 1024香蕉视频| 尤物在线影院点击进入|