Business / Macro

CIC chief bullish on China growth

(Xinhua) Updated: 2013-01-28 09:59

BEIJING - China's economy will grow at more than 8 percent this year, underpinning the global economy that is bound for a "mild, tortuous and slow" recovery in 2013, predicted Lou Jiwei, head of China's sovereign wealth fund, on Saturday.

Demand has become a most-sought-after resource around the globe, and China's economic growth makes up the lion's share of global demand, as market demand in debt-laden Europe is lackluster and even shrinking, Lou, chairman of the China Investment Corp, said at an economic forum in Beijing.

China's economy expanded 7.8 percent year-on-year in 2012, the slowest rate recorded since 1999, but still outperformed many countries and outstripped experts' forecasts.

Decades of skyrocketing growth have made China the world's biggest importer of almost all commodities from cooper to cotton to iron ore, and the core target market of many multinationals.

Meanwhile, Lou noted that China should grasp more foreign investment opportunities, and give companies more freedom in investing overseas.

"Right now, there are a slew of opportunities for cash-rich countries, like China," the CIC chief said. "We should seize them."

The government used to focus on commodities and high-tech industry, eyeing only big financial hubs such as London and Paris, Lou said.

However, more opportunities are looming in a number of sectors and countries.

"Domestic demand is emerging in Russia, African countries and some other developing countries. We should notice the consumption drive in those regions, not just the commodities they produce," he urged the forum.

Lou also warned that the global financial market is still highly volatile. The lingering debt crisis in the eurozone and fiscal cliff in the United States have all weighed on global economic recovery this year.

Meanwhile, monetary quantitative easing has become a global trend. Almost all the central banks of major developed countries are using QE as the bazooka to buoy their economies, according to Lou.

"QE Infinity will become the new feature of the global economic landscape," he said. "Not only the United States, but also Japan and the European Union, they are all using QE Infinity. That is a significant change.

"As long as the inflation growth rate is less than two percent, they will just keep on implementing it," he said.


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