Soft landing more likely in China: economists

14:39, June 29, 2011      

Email | Print | Subscribe | Comments | Forum 

Although the Chinese economy is slowing down, "soft landing is more likely," said economists from Bank of America Merrill Lynch on Tuesday.

"Slowdown in China is a good thing right now. China needs to slow down because there is some overheating going on," Ethan Harris, head of BofA Merrill Lynch's Developed Markets Economics Research, told Xinhua at the company's 2011 Mid-Year Review & Outlook press conference.

Harris said the Chinese economy is expected to slow down to 9 percent and stabilize there, which is good for China at the moment. However, the market tends to overestimate the risk.

"The slowdown will help contain inflation," said Harris, who believes that china's core inflation will creep up further, but will stabilize next year.

Harris pointed out the real test for China is whether the underlying inflation will stabilize or not six months from now when food prices come off a bit. "That's the real test for China," he said

Talking about the heated argument concerning China's real estate bubble, Harris said he doesn't think it's a big risk for China.

"It's to some degree a global phenomenon that big cities have high real estate prices," said Harris. "Is there risk of a bubble? Yes! But is there gonna be a big blowup soon? I don't think so."

David Bianco, head of U.S. equity strategy at BofA Merrill Lynch, also said the Chinese economy is not turning to "something that more of a hard landing."

"From equities perspective, the way the U.S. stocks benefit from China' s rapid growth is through the commodity complex and capital good demand," Bianco said. He believes China's growth is "robust enough" to generate strong earnings for the U.S. companies.

  Weekly review  


  • Do you have anything to say?


Special Coverage
  • Beijing-Shanghai High-Speed Train now in Operation
  • From drought to floods
Major headlines
Editor's Pick
  • Exhibition on 'red printings' held in Beijing
  • Gold falls below 1,500 USD per ounce as dollar strengthens
  • Lagarde tapped as first IMF woman chief, Carstens bows out
  • U.S. beats DPRK 2-0 at FIFA Women's World Cup
  • President Hu Jintao holds talks with Sudanese President Omar al-Bashir
  • Gaddafi's supporters drill in Beni Walid, Libya
Hot Forum Discussion