China Seeks Growth Above 8%
Eight is a lucky number in Chinese culture. China is hoping it will be lucky enough to keep its economic growth rate above 8%.
The People's Bank of China late Wednesday cut interest rates for the third time in six weeks -- an unusually quick succession of rate cuts for any government, let alone one that overseas an economy growing at 9% a year.
But China is now watching growth rapidly decelerate toward 8%. That's the target Beijing has set for the country for the last several years. Meeting the target hasn't been an issue for some time; GDP growth last dipped below 8% in 1999, when it was 7.6%.
Many economists still estimate 8% is the growth rate China needs to sustain in order to provide employment and improving living standards for its massive population.
China raised interest rates earlier this year to tackle inflation, particularly in food prices, that threatened instability. It is now lowering them to ensure instability doesn't come from a different economic source -- joblessness.
Already there are reports of factories closing and jobs lost in China's coastal regions, its main manufacturing and export areas. In the long term, as China continues to urbanize, a fast growth rate is needed to create enough jobs for the new city-dwellers.
Chinese companies have faced problems as the growth rate fell to 9% in the third quarter of this year from 11.9% in 2007. According to J.P. Morgan Chase, earnings growth at 1,005 Chinese firms listed in Shanghai or Shenzhen fell 21% in the third quarter compared with a year ago. The proportion of loss-reporting companies doubled to 17.8%.
So growth below 8% in China, says Moody's Economy.com economist Sherman Chan, will feel like a recession does in the West.
[ 本帖最后由 chrislau2001 于 2008-10-31 09:32 编辑 ] |
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