Rebound likely in 2016
Economic growth in China will be around 7.3 percent in 2015, and rebound to 7.5 percent in 2016, on the back of a looser monetary policy, said a report published by China International Capital Corporation, making it the most optimistic forecast on the country's economic prospects for next year.
CICC, one of China's top investment banks, expects the government to cut interest rate twice and reduce reserve requirement ratio four times next year. As macroeconomic policy returns to "counter-cyclical", growth will return to the "potential growth rate", it said.
CICC was, however, categorical in pointing out that China's monetary policy lags behind fast-changing economic reality, and that monetary policy was "in effect too tight" this year. The result is the economy is growing at a pace under its "potential growth rate", which was evident in the low inflation and surge in international trade surplus.