China’s Economic Growth Likely to Accelarate

In the third quarter of 2012, China GDP had grown by 7.4 percent year on year and 2.2 percent seasonally adjusted quarter on quarter. And although the annual expansion was the slowest since 2009, the quarterly change has shown some improvement, giving many investors and economists sense of relief.

Indeed, there are clear signs that the Chinese economy has been rebounding. Exports have been steady since May 2012 and industrial production growth was stronger than expected in October and November.  Also, due to the fiscal and monetary policy easing conducted in recent months, the infrastructure investments and medium and long term borrowing have increased. In addition, just ended Central Economic Work Conference  has sent signals of policy support in the form of infrastructure spending. 

More importantly, the overall growth patterns are changing. In 2011 and in first three quarters of 2012 consumption contributed to over 55 percent of the GDP expansion and exceeded the contribution from investment. And even though, the demand for luxury items has dropped in the last few months, retail sales have been growing steady since September.
12/7/2012 7:06:28 PM