A government think tank said China’s gross domestic product will grow about 8.5% in the third quarter from a year earlier, picking up from the second quarter’s 7.9% pace.
The bullish forecast comes against a background of anxiety in world markets that Chinese growth might falter as a boom in fiscal spending and bank lending ebbs. The anxiety, it should be emphasized, almost all comes from analysts. Those were the chaps who were so singularly unsuccesful in forecasting the slump. Now they are coppering their bets and taking a little both ways, in case.
The State Information Center said growth in bank credit would "normalize" in coming months. However, it warned that any abrupt slowdown in lending would leave many state-backed projects unfinished and result in a new crop of non-performing loans.
The China Securities Journal reported new lending will rebound to about RMB500 billion (US$73 billion) in August after shrinking to RMB356 billion in July.
The People’s Bank of China mentioned in a report earlier this month that the central bank was considering fine-tuning monetary policy to avoid possible risks hidden in the huge amount of new loans issued this year. It later clarified its position by saying that it would not set quotas on new loans to rein in liquidity and any fine-tuning would be consistent with its current policy stance.
Shanghai Daily said the think tank forecast that exports would fall 20% in the third quarter, compared with a year earlier, with imports dropping 12.7%. It also said capital spending would remain a key driver for the world’s third-largest economy, and urban fixed-asset investment was likely to rise 32% in the third quarter.