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Economy warms as factories hum again (2)

By Chen Jia and Yu Ran (China Daily)

08:00, November 02, 2012

Qian added that although the situation is getting better there is still a long way to go before the global economy improves.

Shi Jinchuan, dean of the Zhejiang University School of Economics, said the economy's overall situation is getting better although a great many small and medium-sized businesses are still struggling with the high cost of labor and materials, and sluggish demand.

Liu Ligang, chief China economist at the Australia and New Zealand Banking Group, said that "if the current upward trend continues, China's economic growth may hit 8 percent in the fourth quarter, and we are optimistic for the beginning of next year".

Annual inflation will be stable at about 2 percent, according to Liu. He did not expect any new cut in interest rates or the reserve requirement for banks.

Qu Hongbin, chief economist on China with HSBC Holdings, said: "We expect a continuation of the present policies to further boost domestic demand and counterbalance sluggish demand overseas and a gradual recovery in growth in the coming quarters."

Zhang Liqun, an economist with the State Council Development Research Center, a government think tank, said that some industries may have already started to expand too fast.

"To prevent reckless expansion, the government should recommend rational plans to the companies," Zhang said.

He also warned of a possible rebound in the price of commodities, as a result of "many countries loosening monetary policy".

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