World Bank Sees Modestly Faster China Growth in 2010

Source: J.R. WU
Written by: STEPHANI WILLIAMS

The World Bank, in Beijing, said that China's economy is likely to grow modestly faster next year, setting the stage for the government to withdraw some of its pro-growth policies.

Statistics show in its latest quarterly update, the bank forecast China's economy will grow 8.7% in 2010, which is an estimate slightly higher than its revised estimate of 8.4% for 2009. The improvement next year will come from better export performance and a property sector that is continuing to strengthen, the bank says.

Senior Chinese policymakers are confident that China will meet its 8% growth target for this year. Most private analysts also agree that the target is but assured now, which has caused a shift in the policy debate in China.

China's economic data are showing and confirming that the country is headed in the direction consolidating recovery and there is still more"robust" data going forward.

"Beijing's government-led 4 trillion yuan stimulus program is due to run its course at the end of 2010, and there is still concern private demand is too weak to pick up the slack. The state banking system's massive increase in lending has clearly supported the economy, but has also led to worries about speculative capital inflating housing and stock prices."

The World Bank is advising China to keep fiscal poilcy neutral or mildly supportive next year,....

In other words, keeping the size of the budget deficit unchanged or slightly wider.

Though trade is expected to recover gradually next year, China's current surplus should shrink to $261 billion, from $426 billion last year, and is expected to fall further in 2010.

So.....Great Job China!!!! Even though the U.S. is kind of in a different situation, at least you are more rapidly solving your economic problems and your economic data is sigificantly more agreeable. We should probably consider hiring some of your economic policymakers to come over to the United States and help us with our economy but, then again we are already indebted to you and we probably could not afford this specific type expertise.