China ``zero or even negative growth'' predicted for 2009.........shooting fish in a barrel
Oct. 20 (Bloomberg) -- China's economy, the biggest contributor to global growth, expanded at the slowest pace in five years as the financial crisis cut demand for exports. The fifth quarter of slowing growth may exacerbate declines this year in iron ore, copper and oil prices and undermine demand for exports within Asia, where economies are already contracting. The cabinet announced yesterday increased infrastructure spending and tax cuts for exporters and the central bank may be poised to cut interest rates for the third time this year. `Spreading, Deepening' Crisis Growth is slowing across Asia, where Japan's economy shrank in the second quarter and Singapore has tumbled into a recession. Financial market turmoil and a global slowdown ``have started to have a negative impact on China's economy,'' Li Xiaochao, a statistics bureau spokesman, said. ``The subprime crisis that broke out last year in the U.S. is still spreading and deepening.'' China's expansion was the weakest since the severe acute respiratory syndrome, or SARS, epidemic slashed growth in the second quarter of 2003. The median estimate of the economists in the survey was for growth of 9.7 percent. The contribution of trade to growth halved to 1.2 percentage points in the first nine months from a year earlier. Export growth may slow ``substantially,'' Li said. Demand for Steel Rio Tinto Group, the world's second-largest aluminum producer, last week flagged ``significantly weaker'' demand for the metal in China. Prices for Chinese imports of iron ore also fell to a 19-month low on cooling demand from steelmakers. Oil has fallen 47 percent since the start of July and copper has tumbled 43 percent. About half of China's toymakers have shut down this year, with 7,000 workers losing their jobs when Smart Union Group Holdings Ltd. closed factories in Guangdong province this month, state media say. A quarter of 70,000 Hong Kong-owned businesses in the Pearl River Delta may go bust, the Federation of Hong Kong Industries estimated today. The central bank has stalled gains by the yuan against the dollar since mid-July, protecting jobs in export industries. China's export growth may plummet from 22 percent in the first nine months of this year to ``zero or even negative growth'' in 2009, according to Stephen Green, head of China research at Standard Chartered Bank Plc in Shanghai. Home sales by volume plunged 55.5 percent and 38.5 percent in Beijing and Shanghai in the first eight months from a year earlier, according to the official Xinhua News Agency. The State Council said that it would increase the supply of low-cost housing and reduce property transaction fees. To contact the reporter on this story: Kevin Hamlin in Beijing on [EMAIL PROTECTED]; Li Yanping in Beijing at [EMAIL PROTECTED] Last Updated: October 20, 2008 03:02 EDT --~--~---------~--~----~------------~-------~--~----~ Thanks for being part of "PoliticalForum" at Google Groups. For options & help see http://groups.google.com/group/PoliticalForum * Visit our other community at http://www.PoliticalForum.com/ * It's active and moderated. Register and vote in our polls. * Read the latest breaking news, and more. -~----------~----~----~----~------~----~------~--~---
