Report predicts difficult second half for economy
Print Edition
CHINA’S economy will have a difficult second half, according to a report by the Shanghai University of Finance and Economics.
“Risks from both external and internal markets will increase in the rest of the year,” said Huang Xiaodong, a specially appointed economics professor at the university’s Institute of Advanced Research.
“We are not optimistic that China can fulfill the target of a 7 percent growth for the whole year, considering the risks of growing deflationary pressures, local government debt, capital market rout, corrections in the housing sector, failure to get international deals paid, volatility in exchange rate and flee of foreign capital,” Huang said.
Even in the best scenario that China successfully pushes forward its “One Belt, One Road” initiative to boost cooperation with neighboring and other emerging countries while no systemic risks materialize, China’s growth is expected to be around 6.8 percent for this year, the report said.
Besides, the US may raise the interest rates in the following months after it exits from the quantitative easing, the report said, and it will cut global demand and create difficulties for emerging markets.
“China needs to introduce more easing policies to support the growth,” Huang said. “But the authorities should be very careful to balance short-term benefits and long-term hazard that such policies may bring, and make them helpful to the real economy.”
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