China’s GDP growth may hit 9 percent this year from last year as increasing trade with Africa, Latin America and Russia is mitigating the effect of the stalling economy in the US and Europe, DBS Bank economist Chris Leung (梁兆基) said yesterday.
Leung’s forecast was the highest among all research institutions.
His forecast, which he attributed to the improving global economy and China’s ongoing shift toward a more balanced economy, was also stronger than the 7.5 percent forecast by the Chinese government.
If exports from China to African and South American markets advance at their 10-year average pace, the share of these regions would expand to almost 20 percent in 2020, from the current 10.3 percent, said Leung, who was last year invited by the Chinese government to help map out the nation’s future economic path.
“That is about equal to the present share of exports to the EU, making clear the immense importance and future potential of the South American and African markets,” he said.
Since growth in Western markets has stalled, China’s new leaders are seeking to restructure and strengthen the nation’s investment-driven economy, Leung said.
Telecommunications and sound recording apparatus make up the largest share of machinery and equipment exports to South American and African countries, he said, adding that China has provided loans to African allies on condition that they use telecoms systems made by Huawei Technologies (華為).
“That explains why Huawei smartphone sales have surged 40 percent a year in Africa and they are likely to continue to grow rapidly,” Leung said.
A rosy outlook for Chinese exports would be difficult in the medium term, with the trade surplus falling from its peak of 7.6 percent of GDP in 2007 to 3 percent to 5 percent this year, reflecting the persistent economic weakness of China’s major trading partners, he said.
Private consumption, which represents 35 percent of GDP, will not become a key driver of growth overnight, he said.