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Foreign media positive on China's economy
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18:04, July 21, 2009

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Major media in Europe and the US hailed China's economic performance in the first half of the year driven by the country's massive stimulus package.

China's economy grew by 7.1 percent over the first half of the year and the rebound in the second quarter was particularly significant, reaching 7.9 percent, compared with the 6.1 percent growth rate in the first quarter.

Major foreign media regards that as a signal that China's economy is on course for an earlier recovery than any other economy in the world and will meet its target of eight percent growth for the whole year 2009.

"That made China the world's best-performing big economy", said Times. Bloomberg pointed out that China is "the only one of the 10 biggest economies that is expanding". The Associated Press commented that China's strong growth in the second quarter boosted hopes of the countries emerging from the global downturn.

They all recognized the effectiveness of China's stimulus package, attributing China's better-than-expected performance to the government funded spending and surging bank lending.

"That's (China's earlier than expected economic recovery) largely due to the government's massive economic stimulus package unveiled last November, but the private sector is doing its part too", said BBC.

They also hope that the recovery of the world's largest economy would lead the world economic recovery. Washington Post expects China's recovery could boost its imports, which is a boon for American and European producers.

Bloomberg believes China's growth is "highlighting the role the nation may play in easing the worst global recession since the Great Depression".

Emerging economies, led by China, are set to regain growth momentum in the remainder of this year, helping the world to recover from the worst slump since World War II, the IMF said.

But there are also concerns. The Economist sharply points out cautions for China's economy, "Despite the recent lending boom, Chinese banks' mortgage lending is still very conservative compared with that in America—at the peak of America's housing bubble it was easy to get a mortgage for 100% or more of the value of a home. Nevertheless, the lesson of America's financial crisis for China's government is plain: overly loose lending should never be ignored."

Ben Simpfendorfer, China economist at RBS in Hong Kong, told the Times that over-reliance on the stimulus package could have negative consequences. "The important message here is that while the pace of growth is accelerating, the quality is deteriorating. Growth is too reliant on public investment and residential investment. It's not sustainable."

New York Times warned that "China's growth also holds serious risks because of an explosion of bank lending that could eventually lead to non-performing loans, overly aggressive infrastructure spending that could be wasteful, and policies that do not favor private businesses."

CNN indicts that the record rate of lending in China is particularly troubling, saying some market watchers fear it could fuel speculation and create asset bubbles.

Some economists remain concerned about private businesses' continued reluctance to invest, especially as industrial profits continue to fall, according to Wall Street Journal.

Given all of those good signs and looming risks, there will be "debate about the proper course for policy in coming months", as the Wall Street Journal put it.

By People's Daily Online

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