THE Bank of China is positive about Hong Kong's economic growth in 1995, predicting a six per cent economic growth based partly on the conviction that China is heading for a soft landing.
The forecast represents the most optimistic picture painted by Hong Kong's note issuers so far, as both Hongkong Bank and Standard Chartered envisage a cautious 5.8 per cent gross domestic product growth.
The Bank of China rejects the caution about mainland economic reform believing it will have a positive effect: 'The chance of realising a soft landing in China is very high.' Its quarterly report, the bank says macroeconomic reform will continue and to control inflation, Beijing will tighten infrastructural investment, consumption expenses of state-owned enterprises and restrain excess credit growth.
'The government will strike a balance between economic adjustment and development . . . as such, it is estimated that the Chinese economy will have a successful soft landing and not wild fluctuations,' the Bank of China Group report says.
That means China's overheated economy will steadily slow down to a reasonable, yet high, level. Spiralling inflation will also come down substantially, it says.
The report is confident about the way the Chinese Government will handle the delicate relationship between economic reform, development and stability.