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China economist Jun Ma said in a research note that Deutsche had upgraded itsgross domestic productgrowth forecast because of accelerating expansion of fixed-asset investment (FAI) and factory output.
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Ma said that quicker investment and production growth would be sustainable over the coming quarters because high profits were giving firms an incentive to invest and because there was plenty of non-bank financing available to them.
"We believe that theGDP, FAI and IP growth remain within the government's tolerance range and will unlikely trigger harsher administrative measures to significantly slow down investment growth," he added.
Deutsche's revision follows a similar move this week by Morgan Stanley, which upped its 2007 GDP growth forecast to 10.5 percent from 9.3 percent. Earlier this month, HSBC increased its forecast to 10.6 percent from 10.0 percent.
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