【卫报】World Bank sees positive signs in Chinese economy

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World Bank sees positive signs in Chinese economy
China set to achieve 7.2% economic growth this year
http://www.guardian.co.uk/business/2009/jun/18/china-economic-recovery-world-bank
Chris Tryhorn and agencies
guardian.co.uk, Thursday 18 June 2009 09.01 BST



Construction workers in Hefei, China. Photograph: STR/AFP/Getty Images




The World Bank has raised its growth forecast for China as the country looks to be doing better than expected in the face of the global economic downturn.

China's economy is now expected to grow 7.2% this year, the World Bank says, upgrading its previous forecast of 6.5%.

But the bank warned that it was too early to judge whether China was on course for a lasting recovery, despite an even better forecast of 7.7% growth in 2010.

"Growth in China should remain respectable this year and next, although it is too early to say a robust recovery is on the way," said Ardo Hansson, the bank's lead economist for China.

He said China had benefited more than expected from a government stimulus package designed to protect it from the worst effects of the global downturn.

The Chinese government has injected 4 trillion yuan (£360bn) into the economy through higher spending on public works.

In its latest quarterly report, the bank said trade and private investment in China would remain weak, while consumption would slow down.

A full recovery would be dependent on the rest of world's fortunes improving, driving a rebound in demand for China's exports, the report said.

China's economy grew 6.1% year on year in the first quarter of 2009, a far better performance than those recorded by western countries, many of which are in negative territory.

However, it was still down on the government's target of 8% and well adrift of the 13% increase recorded in 2007.

Of this year's projected growth, six percentage points were attributable to the government's stimulus, said World Bank economist Louis Kuijs.

Another 3.6 percentage points would be derived from private activity, offset by a 2.4 percentage point fall in exports.

"We see very little growth coming out of the market-based economy in 2009," Kuijs said. "We do expect a nice pick-up in exports next year, so that will help."

Today's more positive verdict on the Chinese economy follows two downgrades to the bank's growth forecast for 2009.

In November, it cut the predicted growth rate from 9.2% to 7.5% and in March took it down again, to 6.5%.