China is not immune to the global financial fallout but has a buffer as a result of its wealth accumulation, internal demand potential and flexible policy maneuvers, said a spokesman of the statistics bureau yesterday.
Economists widely expect authorities to make several stimulating policies to boost the economy and confidence amid the global financial meltdown and a slowing economy.
China's gross domestic product growth slowed to a five-year low of 9 percent in September. Its economic growth for the first three quarters was 9.9 percent year on year, down from 10.4 percent in the first half. Other major economies including the United States and Europe are also mired in recession worries.
"It's true that the ongoing financial crisis will cloud China's economic prospects," said Li Xiaochao, spokesman of the National Bureau of Statistics, at a press briefing in Beijing yesterday.
Li said China will closely watch the crisis' impact on its foreign investment, exports and investor and consumer confidence.
China attracted US$74.4 billion in foreign direct investment in the first three quarters while FDI for the whole of 2007 totaled US$78.3 billion.
However, Li reiterated China still has a buffer to cushion the negative impact. He cited China's wealth accumulations from the 30 years of opening up its economy, its high-savings tradition, a robust growth potential, and the room to adjust the export structure to shift to emerging markets and macro-economic measures as shields against the financial crisis. Economists, meanwhile, said positive steps are in the pipeline to bolster the Chinese economy.
"The massive slowdown in economic expansion is a threat to employment, and will certainly see the central authorities implement further stimulating policies to rebuild growth momentum," said Sherman Chan, a Moody's Economy.com economist yesterday.
Lu Zhengwei, chief economist of Industrial Bank, expects one more interest rate cut this year. The reserve requirement ratio for the big five banks is expected to drop to 10 to 12 percent from 17 percent now. China has already cut its interest rates twice since mid-September this year.
(Shanghai Daily October 21, 2008)
