China’s growth will slow to 7.5 percent next year — the lowest rate since 1990 — as the global financial crisis takes a greater toll on the world’s fourth-largest economy, the World Bank said yesterday.
The multilateral lender cut its forecast for next year growth from 9.2 percent, but said Beijing’s multibillion-dollar stimulus plan would help smooth the sharp edges of steep declines in global and domestic demand. It expects 9.4 percent growth this year.
China’s downturn — signs of which emerged in the third quarter — will worsen in the first half of next year as exports weaken, World Bank economist Louis Kuijs said as the bank issued a quarterly economic report.
The country has been relatively unaffected by the global crisis so far because its banks are healthy and exports are strong, but “we will see that impact intensify in 2009,” Kuijs said.
Conditions should improve later next year, but any firm forecast was difficult amid the global turmoil, he said.
Beijing’s stimulus plan announced on Nov. 9 should help to shield China from the global downturn by buoying growth and employment, said the World Bank’s China representative, David Dollar. The US$586 billion plan calls for injecting money into the economy through spending on construction, tax cuts and aid to the poor and farmers.
“We are confident that China has the tools to keep its growth rate at a healthy level and most importantly to create about the number of jobs it needs,” Dollar said.
Beijing announced the stimulus after China’s growth slowed to 9 percent in the latest quarter from 11.9 percent last year. The unexpectedly sharp downturn alarmed leaders in Beijing, who worry about job losses — especially in export industries, which have been hit hard by weak global demand — and possible unrest.
If China’s growth next year falls to the World Bank’s projected 7.5 percent, it would be the weakest since 1990’s 3.8 percent rate and just below the 7.6 percent reported in 1999.
The World Bank forecast is in line with projections by investment banks, which have cut their China outlook several times as global conditions worsened.
Kuijs said Beijing has room to cut interest rates further and needs to take additional steps to stimulate growth as spending by consumers and companies weakens.
“We feel that confidence and fundamentals for the private sector have weakened quite a bit over the past half-year. We are less optimistic about private sector consumption than we were a half-year ago,” he said.
Weaker export prospects and a sharp downturn in real estate sales have made private companies reluctant to expand and hire new workers, Kuijs said.
EXPRESSING GRATITUDE: Without its Taiwanese partners which are ‘working around the clock,’ Nvidia could not meet AI demand, CEO Jensen Huang said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and US-based artificial intelligence (AI) chip designer Nvidia Corp have partnered with each other on silicon photonics development, Nvidia founder and CEO Jensen Huang (黃仁勳) said. Speaking with reporters after he met with TSMC chairman C.C. Wei (魏哲家) in Taipei on Friday, Huang said his company was working with the world’s largest contract chipmaker on silicon photonics, but admitted it was unlikely for the cooperation to yield results any time soon, and both sides would need several years to achieve concrete outcomes. To have a stake in the silicon photonics supply chain, TSMC and
IDENTITY: Compared with other platforms, TikTok’s algorithm pushes a ‘disproportionately high ratio’ of pro-China content, a study has found Young Taiwanese are increasingly consuming Chinese content on TikTok, which is changing their views on identity and making them less resistant toward China, researchers and politicians were cited as saying by foreign media. Asked to suggest the best survival strategy for a small country facing a powerful neighbor, students at National Chia-Yi Girls’ Senior High School said “Taiwan must do everything to avoid provoking China into attacking it,” the Financial Times wrote on Friday. Young Taiwanese between the ages of 20 and 24 in the past were the group who most strongly espoused a Taiwanese identity, but that is no longer
A magnitude 6.4 earthquake and several aftershocks battered southern Taiwan early this morning, causing houses and roads to collapse and leaving dozens injured and 50 people isolated in their village. A total of 26 people were reported injured and sent to hospitals due to the earthquake as of late this morning, according to the latest Ministry of Health and Welfare figures. In Sising Village (西興) of Chiayi County's Dapu Township (大埔), the location of the quake's epicenter, severe damage was seen and roads entering the village were blocked, isolating about 50 villagers. Another eight people who were originally trapped inside buildings in Tainan
SHARED VALUES: The US, Taiwan and other allies hope to maintain the cross-strait ‘status quo’ to foster regional prosperity and growth, the former US vice president said Former US vice president Mike Pence yesterday vowed to continue to support US-Taiwan relations, and to defend the security and interests of both countries and the free world. At a meeting with President William Lai (賴清德) at the Presidential Office in Taipei, Pence said that the US and Taiwan enjoy strong and continued friendship based on the shared values of freedom, the rule of law and respect for human rights. Such foundations exceed limitations imposed by geography and culture, said Pence, who is visiting Taiwan for the first time. The US and Taiwan have shared interests, and Americans are increasingly concerned about China’s
RSS