Potential soft-landing in China Economy rather than a hard one: U.S. experts

China’s economic slowdown appeared to be heading for a soft-landing, said experts here on Thursday in a forum sponsored by a U.S. think tank.

China’s economy “is slowing because of policy efforts to cool investments and to control the housing boom, compounded with external headwinds”, said Markus Rodlauer, deputy director of IMF Asia and Pacific Department, in Carnegie Endowment for International Peace, at the forum.

“A large current account surplus (of China), over 10 percent ( of Gross Domestic Product) in 2007 and 2008, has come down to 2.5 percent of GDP,” he said.

Accompanied with external rebalance, Rodlauer also acknowledged the risks that China’s domestic imbalance grew significantly, which was engineered as a response to global crisis.

“In order to sustain this soft-landing in the next few quarters, in order to keep the economy an even growing at around 7 to 8 percent each year, a package of policies is needed to shift towards more consumption-based and inclusive growth,” noted Rodlauer.

Stephen Roach afterwards, a senior fellow of Yale University School of Management, also said “China can and should run a high investment ratio for years, if not decades, especially given their commitment to urbanization, which is a hugely infrastructure- and capital- intensive activity.”

Via – Xinhuanet


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