10-20-2008, 08:59 AM
<b>China's Economy Grows 9%, Slowest Pace in Five Years</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Oct. 20 (Bloomberg) -- China's economy grew 9 percent in the third quarter, the slowest pace in five years, underscoring concern that the spreading financial crisis threatens the biggest contributor to global growth.
The median estimate of 12 economists surveyed by Bloomberg News was for a 9.7 percent expansion, after a 10.1 percent gain in the previous three months. The statistics bureau released the data in Beijing today.
China may cut interest rates for the third time this year after weaker export orders and <b>factory closures for the Olympic Games damped industrial output</b>. The nation will raise investment in infrastructure and boost export-tax rebates to protect the economy from the increasing risks posed by the financial turmoil, the cabinet said yesterday.
<b>``There are no options for the Chinese government except to stimulate the economy -- more monetary easing is needed,'' </b>said Sherman Chan, an economist with Moody's Economy.com in Sydney. She predicts five rate cuts by mid-2009 and the abolition of quotas that limit banks' lending.
<b>Inflation cooled to 4.6 percent in September from 4.9 percent in August.</b>
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<b>The CSI 300 Index of stocks has fallen 66 percent this year. </b>
``The panic in the stock market has spread to the property market,'' said Chan, of Moody's Economy.com. ``Declines in asset prices make people feel less wealthy and they will cut back on consumption and then investment growth will slow.''
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The International Monetary Fund estimated this month that China's economy may expand 9.3 percent next year compared with growth of 0.1 percent in the U.S., 0.2 percent in the euro area, and 0.5 percent in Japan. China was the biggest contributor to global growth last year, according to the organization.
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The median estimate of 12 economists surveyed by Bloomberg News was for a 9.7 percent expansion, after a 10.1 percent gain in the previous three months. The statistics bureau released the data in Beijing today.
China may cut interest rates for the third time this year after weaker export orders and <b>factory closures for the Olympic Games damped industrial output</b>. The nation will raise investment in infrastructure and boost export-tax rebates to protect the economy from the increasing risks posed by the financial turmoil, the cabinet said yesterday.
<b>``There are no options for the Chinese government except to stimulate the economy -- more monetary easing is needed,'' </b>said Sherman Chan, an economist with Moody's Economy.com in Sydney. She predicts five rate cuts by mid-2009 and the abolition of quotas that limit banks' lending.
<b>Inflation cooled to 4.6 percent in September from 4.9 percent in August.</b>
.....
<b>The CSI 300 Index of stocks has fallen 66 percent this year. </b>
``The panic in the stock market has spread to the property market,'' said Chan, of Moody's Economy.com. ``Declines in asset prices make people feel less wealthy and they will cut back on consumption and then investment growth will slow.''
...
The International Monetary Fund estimated this month that China's economy may expand 9.3 percent next year compared with growth of 0.1 percent in the U.S., 0.2 percent in the euro area, and 0.5 percent in Japan. China was the biggest contributor to global growth last year, according to the organization.
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