We believe that the weakness seen in the Chinese economy in 2012 is highly unlikely to mark the low pointin China''s economic cycle. Rather, the downturn was likely a taste of what is in store as the economyrebalances away from its investment-driven growth model. We forecast official headline real GDP growthof 7.5% in 2013, from an estimated 7.7% in 2012, which puts us in the minority of forecasters who expectto see economic growth momentum continue to wane. Externally, despite current stability in the globaleconomy, China is at risk from its huge trade imbalance with the US. The bilateral surplus that China runswith the US continues to balloon. If the personal saving...
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