Mainland growth expected to regain momentum
The mainland's economic growth is expected to rebound in the second half of this year, buoyed by more rapid infrastructure investments, according to the chief economist of the Bank of Communications.
Lian Ping said gross domestic product would rise 8.1 to 8.5 per cent between July and December.
'For the third and fourth quarters, the GDP growth rate will be higher than quarter one and two. But compared with last year, it will be a little bit slower,' he told about 200 delegates to a Journal of Commerce container shipping conference in Shanghai yesterday.
Lian, who is also general manager of the bank's research and development department, said: 'GDP growth this year will be no lower than 8 per cent.'
After growing 8.1 per cent in the first quarter, he said growth in the second quarter would be slower at 7.8 per cent.
A faster pace of economic growth in the second half could be fuelled by an easing of controls on bank lending and a boost in infrastructure spending, Lian said, but he ruled out any repeat of the 4 trillion yuan (HK$4.54 trillion) stimulus package that followed the global financial crisis in 2008. 'This year is different from 2009. Banks won't have the same financing capacity.'
Instead, he said, the increase in spending would come from the mainland authorities accelerating the approval process for projects under the 12th five-year plan.
His views were shared by Barclays Bank analysts in a report on Friday. Chang Jian, a director and an economist, said in the report: 'The National Development and Reform Commission has been accelerating new project approvals in the areas of power, water and railways.
'We think three steps will be taken in June. The government will speed up disbursements to priority projects, private capital will be allowed to fill funding gaps, and the People's Bank of China will ... call upon banks to boost credit.'
Barclays forecast that GDP growth would slip to 7.9 per cent in the second quarter, followed by 8 per cent growth in the third and 8.1 per cent in the fourth.
Lian also said there was 'a very small probability of Greece dropping out the euro zone'.
'It will be a lot worse than predicted and would have a huge impact on the world ... that would last at least three to five years.'
Meanwhile, JPMorgan Chase has cut its full-year economic growth forecast for China to 7.7 per cent, from 9.2 per cent last year. Its analysts said in a note last week the risk of Greece exiting the euro area was 'a significant drag' on China's economic recovery.
Lian was more optimistic about the Japanese economy, although he said the 2.1 to 2.5 per cent growth rate this year would be 'difficult to sustain' next year because of the economic conditions in Europe and the US. By comparison, the US economy would grow 1.8 to 2.4 per cent this year following a resurgence in consumer confidence and an upbeat housing market.
Tim Smith, the north Asia chief executive for Maersk Line, said typically the increase in container volumes was three times GDP growth. After a 7.1 per cent increase in box volumes, the increase in containerised cargo would slow to 4 to 6 per cent this year globally.
Explaining regional variations, Smith said while container volumes on Asia-Europe trades were only expected to climb 2 per cent, trade between China and emerging markets, including Latin America, were set to register 'solid double-digit growth rates'.
The targeted economic growth rate under the mainland's 12th five-year plan to 2015