Uptick in economy could be only temporary
April 25, 2016 Category Macro-economy, Weekly
The China Center for International Economic Exchanges has warned that recent better-than-expected economic data might reflect only a short-term rebound, rather than a long-term reversal of slowing growth. The Center said an expected imminent cut in the central bank’s reserve requirement would help stabilize the economy, but that there was little room to cut benchmark interest rates this year. Economists are concerned over the sustainability of recent growth. They say it has been driven the old-fashioned way – through property investment and infrastructure construction – and that the increase of credit will add to an already heavy corporate debt load. Zhang Xiaoqiang, Executive Vice Director with the think tank, said some big companies were putting the banks loans into their deposit accounts, instead of investing it in the real economy. China’s banks extended CNY4.61 trillion in new loans in the first quarter of the year, up CNY930 billion from a year earlier.
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