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2013 | Buch

China's Macroeconomic Outlook

Quarterly Forecast and Analysis Report, September 2012

verfasst von: CMR of Xiamen University

Verlag: Springer Berlin Heidelberg

Buchreihe : Current Chinese Economic Report Series

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Über dieses Buch

Owing to the decline in domestic investment and trade with the rest of the world, China’s real GDP in the first half of 2012 was lower than expected. Based on forecasts from China’s Quarterly Macroeconomic Model (CQMM), the slowdown of the growth rate in 2013 will be moderate as a result of modestly proactive macro control policy. GDP would grow at 8.01 percent in 2012, and then rebound to 8.29 in 2013; CPI would fall to a 2.9 percent in 2012, and then would pick up to 3.27 percent in 2013. In the scenario in which the sovereign debt crisis in the euro area worsened in the second half of 2012, real GDP is forecast at 7.71 percent for 2012 and 7.5 percent for 2013. Even if the external economic environment becomes worse, China’s growth is expected to stay at above 7.5 percent, which might be a steady growth rate for the near future. If China plans to achieve a higher growth rate by launching the “2 trillion massive investment package”, the growth rate of GDP could be increased to 8.25 and 8.86 percent in 2012 and 2013 with a risk of inflation and worsening economic structure.

The policy implication from CQMM: on one hand the Chinese government should be able to maintain the growth rate of around 8 percent by means of timely fine-tuning of monetary policies; on the other hand, the emphasis of the micro control should be placed on structural adjustments through fiscal policies. In the long run, deepening economic, social and institutional reform will be crucial to remove the significant structural imbalance and institutional barriers to market competition, to accelerate the transformation of economic development patterns, and finally to maintain a sustainable growth rate.

Inhaltsverzeichnis

Frontmatter
Chapter 1. Review of Macroeconomic Performance in the First Half of 2012
Abstract
In the first half of 2012, the quarterly growth rate of China’s GDP continued to decline compared to the same period of last year. The cumulative growth rate of GDP for the first half was 7.8 %, which is the lowest level since the first quarter of 2010. From the long term perspective, the slowdown of economic growth is the outcome of global economy rebalancing. It also is associated with the declining of China’s potential economic growth rate, after China ended a development stage with two-digit growth rate over the past 30 years and stepped into a new development stage at a slight low growth rate as a middle income country. From the short term perspective, it was partly due to economic recession in the euro area. It also resulted from excess production capacity, structural imbalance in manufacturing industry caused by rapid domestic investment expansion in the past few years, and the new real estate market regulations. The declining economic growth in China, together with uncertainty of the EU and the US economy, has triggered concerns about the future economic outlook. Thus, it is highly important that China adopts proper measure to stabilize economic growth and create conditions for further social and economic reforms and transformation of economic development pattern (Fig. 1.1).
Center for Macroeconomic Research of Xiamen University
Chapter 2. Forecast for 2012–2013
Abstract
Uncertainties in external markets are still major sources of economic fluctuation in China for 2012–2013. In the first half of 2012, the euro area has involved into severe economic turmoil, ending up with a growth rate of −0.8 % in the second quarter, after an optimistic growth rate of 0.06 % in the first quarter (in terms of seasonally adjusted annualized rate). The outlook for the euro area in 2012 is forecast to grow by −0.3 %, according to World Economic Outlook (IMF, July 2012). On the other side, the U.S. economy has been on the road to a weak recovery without a rapid decline in unemployment rates. Meanwhile, depressed real estate market and “fiscal cliff” continue to put downward pressure on its recovery. As a result, economic growth is forecast to grow at 2.0 % in 2012 for the United State according to IMF. For 2013, the global economy is expected to rebound, with a growth rate of 0.7 % for the euro area, and 2.3 % for the United State. We assume in a baseline model that, in the context of relatively optimistic outlook for the world economy in the line with IMF’s projections, in the second half of 2012, the economy in euro area is expected to show signs of recovery, and the U.S. economy is expected to continue its weak recovery. Specifically, in the third quarter of 2012, the 17 countries in the euro area are expected to suffer an economic contraction of 0.4 %, before picking up with a positive growth rate of 0.4 % in the fourth quarter (see Fig. 2.1).
Center for Macroeconomic Research of Xiamen University
Chapter 3. Policy Simulation
Abstract
Since the global financial crisis in 2008, the Chinese government has taken powerful anti-crisis measures. A “4 trillion Yuan stimulus package” was one of measures used to avoid the China’s economy from plunging. After the China’s economy picked up in the first quarter of 2010, the quarterly growth rate (cumulative year-on-year base) continued to decline as those anti-crisis measures faded out, more recently, as a result of high economic risks in the euro area and the U.S. (see Fig. 1.​1). The growth rate of GDP in the second quarter of 2012 reached a new low level of 7.8 %. The perspective on the global economy is expected to be gloomy in short term. In the case where the euro area falls apart and turns into another deep recession, which would significantly undermine the U.S. economic recovery, how much would that affect the China’s economy, and would the China’s economy need a new stimulus package with massive investment expansion? Without answering these questions, the local governments have begun to call for and plan on some magnificent investment projects.
Center for Macroeconomic Research of Xiamen University
Chapter 4. Policy Implication and Recommendations
Abstract
How to carry out macroeconomic policies in the next 2 years has attracted a lot of attention because the uncertain external economic outlook: to maintain a high growth rate, by continuing the traditional development pattern and go all out or to achieving steady growth by implementing a mild strength expansionary control policy, gradually shifting policy and then focusing on deepening reform and structural adjustments?
Center for Macroeconomic Research of Xiamen University
Chapter 5. Comments and Discussions
Abstract
It is an outstanding report on macroeconomic forecasting and analysis that has been done very meticulously and seriously, and its policy suggestion is also feasible. I basically agree with the basic conclusions of the report and analysis.
Center for Macroeconomic Research of Xiamen University
Metadaten
Titel
China's Macroeconomic Outlook
verfasst von
CMR of Xiamen University
Copyright-Jahr
2013
Verlag
Springer Berlin Heidelberg
Electronic ISBN
978-3-642-36923-0
Print ISBN
978-3-642-36922-3
DOI
https://doi.org/10.1007/978-3-642-36923-0