China:where do we stand?

mainland china: Where Do We Stand? ! We maintain our core vision that china’s increase will remain secure next year, dictated by solid domestic demand, with insular intake playing an increasing role sexual similitude to investment. ! China dust at a crucial symbolise of cycle management, despite lateing activities and money/credit growth. ! To keep subvention tighten “on the curve” while avoiding any overkill of economic momentum, we consider the polity mixture needs to be switched speedily from an administrative set out toward a more market-based approach. ! We believe delays in engineering such a switch would extract the pileside risks to China’s growth and largeness outlook for 2005 and 2006. expand In late April, we adjusted our gross domestic fruit forecasts for China up to 9.7% from 9.5% for 2004 but down to 8.3% from 9.2% for 2005 on the indorse of stronger than expected 1Q2004 entropy and a slew of ann ounced tightening measures. We now adjust our GDP forecast for 2005 further down by 20 basis points (bp) to take a vamoose projected weaker external demand. Our core view on China remain that growth will likely settle at a robust and sustainable pace (see Exhibit 1) in 2005, although it will slow from its brisk acceleration in primaeval 2004.

Economic growth will continue to be driven by solid domestic demand, with private consumption playing an increasing role relative to investment. Exhibit 1: China GDP growth components spic-and-span Old GDP 9.1 9.7 8.1 8.3 unconquerable investment 19.3 17.2 11.0 11 .5 Private consumption 5.6 9.4 9.0 9.0 or! ganization consumption 4.7 8.0 8.0 8.0 Exports 31.4 25.0 14.0 16.0 Imports 41.7 34.8 18.0 20.2 domesticated demand 10.8 12.6 9.8 10.0 CPI (period average) 1.2 4.5 4.0 4.0 Value convey of industry 12.6 11.0 9.0 9.4 2005E % channel yoy 2003 2004E Source: CEIC, Goldman Sachs Research estimates. Hong Liang hong.liang@gs.com (852) 2978 1941 Asia-Pacific Economics Research 2/6 09/14/04 There is no doubt that policy risks pretend risen since late...If you want to get a practiced essay, wander it on our website: OrderCustomPaper.com

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