Hendrik_2000
Lieutenant General
Nothing will happened China will keep on growing. China's economy have their own momentum regardless what happened in Europe
By Shiyin Chen
June 17 (Bloomberg) -- China’s economy is like a “runaway express train” and may sustain its pace of growth amid the nation’s tightening measures and Europe’s sovereign-debt crisis, Aberdeen Asset Management Plc said.
The Conference Board said June 15 a leading economic indicator for China gained the most in 14 months, reports last week showed a surge in exports, industrial production and retail sales that signaled strength in the world’s fastest-growing major economy. The Shanghai Composite Index rose 0.4 percent as of 9:42 a.m. after a three-day holiday.
The MSCI World Index rose 2.6 percent this week, trimming its losses this year to 5.1 percent, as the Chinese leading indicator and gauges tracking New York manufacturing and U.S. consumer confidence helped overshadow a downgrade in Greece’s debt rating by Moody’s Investors Service to junk status. The Shanghai Composite has fallen 21 percent this year, Asia’s worst performer.
“The Chinese economy is a little bit like a runaway express train,” Peter Elston, a Singapore-based strategist at Aberdeen Asset, said in an interview yesterday. “Even if the West does go through some sort of relapse, I do see China being able to maintain some sort of momentum simply because it has the capital domestically that’s needed to supply its economy.”
While the “weakness” in Europe and a possible slowdown in the U.S. may affect China’s exports, the nation’s economy is now less dependent on overseas shipments, according to Elston. The European crisis also suggests that there’s less reason for China’s government to continue tightening measures even amid “signs of overheating” in the nation’s economy, he said.
Best-Performing Economy
The Conference Board’s measure for the Chinese economy gained 1.7 percent to 147.1 in April, compared with a revised 1.2 percent increase in March. China is among the world’s best- performing economies, according to Bill Adams, resident economist for the New York-based research organization.
The economy is unlikely to suffer a “double dip” in its growth rate as the government maintains its moderately loose monetary policies, Ma Jiantang, head of the National Bureau of Statistics, said in an event in London yesterday. “I personally think there’s very little chance China’s economy will have a double dip,” Ma said. “Double dip means the economy will go back to the lowest growth rate last year of 6.2 percent.”
Growing Credit Risks
China’s banking regulator said this week it sees growing credit risks in the nation’s real-estate industry and warned of increasing pressure from non-performing loans. Risks associated with home mortgages are rising and a “chain effect” may reappear in real-estate development loans, the China Banking Regulatory Commission said in its annual report on June 15.
The “bubble” in China’s property market is going to burst very quickly, with prices set to fall as much as 20 percent in the next 12 to 18 months, Nomura Holdings Inc. economist Sun Mingchun said in a Bloomberg Television interview yesterday. Real-estate prices jumped 12.4 percent across 70 cities in May, adding to the 12.8 percent record surge in April.
