20/10/2008 - 15:23

China to weather economic storm: CommSec

20/10/2008 - 15:23

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The Chinese economy is expected to remain resilient over the next financial year and is well placed to weather a downturn in the global economy, according to CommSec.

The Chinese economy is expected to remain resilient over the next financial year and is well placed to weather a downturn in the global economy, according to CommSec.

CommSec's latest economic insight report, released today, showed China continued to grow solidly in the September quarter, with gross domestic product expanding at 9 per cent from a year earlier despite the shutdown for the Olympics.

Retail sales remained robust, up 23.2 per cent on a year earlier, but just shy of the record pace of growth hit in July.

Nonetheless, Chinese retail sales still grew close to the fastest pace in a decade, thanks in part to sustained strong income growth.

Industrial output expanded by 11.4 per cent in the year to September, down from 12.8 per cent in the year to August, and just below expectation of around 13.4 per cent.

China's trade surplus climbed to a record $29.3 billion in September as import growth matched the slowest pace in a year.

While many countries around the world that are skirting recession territory, China is certainly not immune to the slowdown noted in the global economy, the report said.

But, with further rate cuts and the possibility of a fiscal stimulus package on the agenda, the Chinese economy is expected to remain resilient over the next financial year, with annual growth of between 8 -9 per cent.

"The long term fundamentals for the China story still remain broadly positive. With a population of 1.3 billion consumers, Chinese authorities continue to re-iterate their plans for income growth, not just in urban centres but also driving wealth and growth further into rural sectors," the report said.

"China is in an enviable position of being much better positioned than most emerging or advance nations. The government will focus on supporting growth through a number of measures. Expect rate cuts and fiscal stimulus policies to be on the agenda."

 

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