Bold China sees signs of recovery

By Jamil Anderlini in Beijing, 03/06/09

China’s top economic officials said they saw signs of

economic recovery thanks to government efforts to boost

growth, but analysts warned Beijing might be getting

complacent as it tried to shore up confidence amid a

pronounced slump.

“We can see the economic figures are already stabilising

and recovering, which shows the [government’s stimulus]

policies have started to take effect,” Zhou Xiaochuan,

China’s central bank governor, said at a press conference

on Friday on the sidelines of the annual meeting of the

country’s rubber-stamp parliament.

His optimism was echoed by Xie Xuren, the finance

minister, and Zhang Ping, chairman of the National

Development and Reform Commission, the country’s

powerful economic planning agency.

“The measures taken have been positive and efficient,”

said Mr Zhang.

“They have been very effective in stopping the slowdown 

in economic growth, in overcoming the difficulties of

enterprises and in expanding consumption.”

He said some export sectors were showing signs of

recovery but a Chinese newspaper reported on Friday

that exports and imports both fell more than 20 per cent in

February. Exports fell 17.5 per cent and imports fell 43.1

per cent in January.

Analysts who have studied China’s 2009 budget say the

new money attributable directly to the stimulus plan 

probably amounts to Rmb 400bn this year.

In the southern province of Guangdong, China’s biggest

manufacturing and export hub, exports fell at a slower

pace last month than in January, according to the

province’s governor.

“Our exports dropped 31 per cent in January, and still fell

by another 20 per cent in February,” said Huang Huahua.

He added the provincial government hoped to avoid

negative export growth for the full year. “With zero per

cent growth in exports, we can still achieve our growth

target of 8.5 per cent [for 2009],” he said.

“The government is really complacent and that worries

me,” said Frank Gong, head of China research for

JP Morgan.

“They seem to be satisfied with the performance of the

economy but the worst is yet to come in export

performance, deflation is imminent and to sustain the

current fragile recovery they need to provide more policy

stimulus.”

Since late last year, Beijing has announced a series of

initiatives to stimulate the economy, including a vaguely

defined Rmb 4,000bn ($585bn, ?465bn, £414bn)

“investment plan” which focuses on building infrastructure

and improving social services.

The government will fund only about a quarter of the Rmb

4,000bn plan, with local governments, state and private

companies and state-owned banks expected to pay for

the rest.

Much of the planned investment was already in the

pipeline but has been accelerated, and analysts who have

studied China’s 2009 budget say the new money

attributable directly to the stimulus plan probably amounts

to Rmb 400bn this year.

The government has also announced Rmb 500bn in

projected tax cuts but analysts say this may not be

enough for the government to hit its 8 per cent gross

domestic product growth target for the year.

“The government is starting to believe its own

propaganda,” said an analyst who asked not to be named

for fear his employer would lose business in China. “Their

projections for fiscal revenue are overly optimistic.”

Li Deshui, the former statistics bureau chief who moved

markets around the world on Wednesday with comments

about an imminent new Chinese stimulus package, told

reporters yesterday he had been misquoted and there

was no need for big new stimulus measures.

“The Chinese economy is not in recession and will not

enter recession,” Mr Li said at a press conference. “Open

your eyes and take a look, which country in the world has

economic growth as high as China? I can say with

confidence that 8 per cent growth will be realised.”

Additional reporting by Kathrin Hille, Copyright The

Financial Times Limited 2009

轉貼自︰

http://www.ft.com/cms/s/0/9e61eb9e-0a6d-11de-95ed-0000779fd2ac.html?ftcamp=rss&nclick_check=1

本文於 修改第 3 次