Friday, October 19, 2012

Stimulus is out as growth no longer slows down - Wei Gu

Wei Gu
The expectations of yet another government stimulus plan might have to be shelved, as the decline of economic growth is stalling, writes Reuters' columnist Wei Gu in BreakingViews.

Wei Gu:
At 7.4 percent, China’s third-quarter GDP growth rate was the lowest for three years. But it looks like the worst of the recent de-acceleration is over... 
Many investors are reluctant to give up on their expectations of a big slowdown, possibly because they would welcome the effect of a huge stimulus programme on asset prices. But while September’s consumer prices inflation rate was a low 1.9 percent, leaving room for an official push, the new generation of leaders is likely to believe the Statistics Bureau, which is confident that the full-year target of 7.5 percent GDP growth will be met. Besides, the target rate in the latest five-year plan is just 7 percent. 
If unemployment were perceived as a serious threat, things might be different. But Foxconn, an Apple contractor, reports difficulties in recruiting and retaining workers. Job vacancies continue to outnumber job seekers at labour bureaus in the third quarter. Overall, it looks like Beijing has done a pretty good job of fine-tuning this still fast-growing economy.
More in BreakingViews.

Wei Gu is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers' request form.
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