Chinese President Hu Jintao (胡錦濤) said a slowdown in exports is putting downward pressure on the world’s second-biggest economy, and he pledged to boost domestic demand and promote more balanced growth.
“Economic growth is facing notable downward pressure, some small and medium enterprises are facing a hard time and exporters are facing more difficulties,” Hu said yesterday at the APEC CEO summit in Vladivostok, Russia.
“We have an arduous task of creating jobs for new entrants to the labor force,” he said.
Photo: AFP
The slowdown is increasing pressure on Hu as China tries to ensure a smooth transition of power to a new generation of leaders at a once-in-a-decade Chinese Communist Party Congress this year. Europe’s debt crisis and anemic US growth may hinder a rebound in exports, while at home a slump in earnings is deterring companies from spending and banks face rising debts.
Asia’s biggest economy expanded 7.6 percent in the second quarter from a year earlier, the slowest pace in three years, after the government moved to counter inflation and surging property prices after its 2009 stimulus.
Exports in July rose 1 percent from a year earlier and shipments in the first seven months rose 7.8 percent, compared with a 23.4 percent rise in the same period last year.
UBS AG and ING Groep NV on Friday cut their full-year forecasts for economic expansion to 7.5 percent, which would be the slowest pace in 22 years.
“They’ve screamed from the rooftops for three years they are trying to slow things down to kill inflation and to kill the property bubble,” said Jim Rogers, chairman of Singapore-based Rogers Holdings, an interview in Vladivostok on Friday. “Now it’s happened.”
The deceleration in China’s economic growth will probably extend into a seventh quarter, with ING estimating a slowdown to 7.1 percent and Bank of America Merrill Lynch projecting 7.4 percent for the three months ending this month.
Data due today may show industrial output growth slowed to 9 percent last month from a year earlier, the slowest pace this year, according to the median estimate in a Bloomberg News survey of 35 economists. Exports last month probably rose 2.9 percent from a year earlier, according to a separate survey before tomorrow’s report. Overseas shipments climbed 24.5 percent in August last year.
Hu said China’s economy was characterized by a “lack of balance, coordination and sustainability” and that the country would promote “inclusive growth” to improve people’s lives.
China’s Gini coefficient, a measure of inequality, has risen more than any other Asian economy in the past two decades, Murtaza Syed, the IMF’s resident representative in Beijing, said in February.
The government has not released an overall Gini figure since 2000, although ousted former Chongqing Communist Party secretary Bo Xilai (薄熙來) said in March it had exceeded 0.46, above the point that triggers social unrest.
“The route we’ve taken is to allow a portion of the population to grow wealth before everyone else,” China Construction Bank Corp (中國建設銀行) chairman Wang Hongzhang (王洪章) said in a panel discussion at the APEC summit yesterday. “By 2050, we hope to have a society where a large part of the population can share in that equitably.”
Hu’s standing with international investors has suffered ahead of the leadership change later this year. In a quarterly Bloomberg Global Poll published on Friday, two in five voiced pessimism about the impact of his policies on the investment climate in China. That was up from less than one in three in May and is the highest negative reading since the poll began asking that question two years ago.
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
Greek tourism student Katerina quit within a month of starting work at a five-star hotel in Halkidiki, one of the country’s top destinations, because she said conditions were so dire. Beyond the bad pay, the 22-year-old said that her working and living conditions were “miserable and unacceptable.” Millions holiday in Greece every year, but its vital tourism industry is finding it harder and harder to recruit Greeks to look after them. “I was asked to work in any department of the hotel where there was a need, from service to cleaning,” said Katerina, a tourism and marketing student, who would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
RSS