From Overseas Press

China economy resilient, for now

(Agencies)
Updated: 2011-06-24 10:55

BEIJING - China's growth is slowing under the weight of Beijing's anti-inflation campaign and weaker global demand, but any investors betting on a hard landing would be underestimating the resilience of the world's second-largest economy.

China's relentless urbanisation continue to drive expansioneven as Beijing seeks to check unfettered investment by growth-obsessed local authorities, while stronger domestic consumption is providing a firmer cushion against external shocks.

But sceptics who are expecting an abrupt economic slowdownmay have miscalculated Beijing's resolve to act quickly if needed to revive growth, especially if inflation eases later this year as expected, reducing the need for fresh monetary tightening measures, analysts say.

"People always over-worry about a China hard landing.Clearly there are a lot of problems with the economy but people may underestimate the government's ability to muddle through." said Stephen Green, an economist at Standard Chartered Bank in Hong Kong.

Global investors are unnerved by any sign of a slowdown in China, a key global growth engine, even as the US economic recovery loses momentum and Europe struggles with a sovereign debt crisis. An abrupt slowdown in China could hammer international financial markets and stifle demand forcommodities from iron ore to soybeans.  

Fears of a hard landing have gained traction as a recent stream of data showed the turbo-charged economy is cooling, but for now China shows no signs of following the West with growth levels falling well below long-term trends. Indeed, most market watchers typically define a hard landing in the Chinese context as a sudden dip in quarterly GDP growth below 8 percent, a level advanced economies can only dream about.

Many economists, while trimming their growth forecasts for China, don't believe the current slowdown will amount to a slump akin to that during the global financial crisis. Most still expect GDP growth of more than 9 percent in the second quarter from a year earlier compared with 9.7 percent in the first quarter, with full-year growth seen at about 9 percent