Economists post new year outlook for China's economy

(Xinhua)
Updated: 2009-01-05 19:47

BEIJING - Chinese shares rose on new year's first trading day, raising people's expectations about the country's economy. Xinhua has collected experts' views on much-talked-about economic topics here Monday.

The domestic stock market is expected to rebound in 2009 after Waterloo-like condition last year. The benchmark Shanghai Composite Index tumbled to around 2,000 points by December from its peak at 6,124 in 2007.

Jin Bosong, economist with the Ministry of Commerce (MOC), said market performance would improve with the country's economy getting better.

"Massive boost like what we experienced in 2007 is unlikely, however," said Zhao Xijun, professor of finance at Beijing-based Renmin University of China, warning investors to be optimistic but cautious.

Both Jin and Zhao expected GDP to grow above 8 percent in 2009 with the 4 trillion yuan (US$586 billion) economic stimulus package and other policies.

As to whether or not the Chinese currency will further rise against the US dollar, Tan Yaling, expert with the national association on international economy, said space was limited for the yuan to further appreciate.

Zhang Yansheng, chief economist under the National Development and Reform Commission (NDRC), held a similar view. "A rapid yuan devaluation will lead to trade conflict with the West. A big rise will hurt domestic enterprises. Either direction is unlikely," he said.

Meanwhile, economists predicted 2009 to be a difficult year for China's export, which suffered from shrinking overseas demand last year.

"It will not improve without markets in America, Europe and Japan recovering," Zhang said.

All the experts said the country would continue buying US treasury bonds.

"As long as our trade surplus against the United States remains, China will keep increasing the amount of American bonds it holds," said Shen Jiru, economic researcher with the Chinese Academy of Social Sciences.

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