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China's economy seen bottoming out

(Shanghai Daily)

10:53, November 03, 2012

China's economy is bottoming out as manufacturing activities are recovering and the real estate market seems to be stabilizing, JP Morgan chief China economist Zhu Haibin said Wednesday.

"The good news is that the mild economic stimulus policies are gradually taking effect, especially in terms of infrastructure investment," Zhu said in Shanghai. China's manufacturing activities may have also rebounded in October, as Zhu said he predicted the official Purchasing Managers Index, due out today, to reach 50.2.

His view is shared by among other economists who expect that the manufacturing industry has recovered in October from two consecutive months of contraction, according to surveys by Bloomberg News and Reuters.

On housing, JP Morgan data showed the Chinese now need to spend an average of eight years' income to afford a 90 square-meter home, instead of 10 years in 2010.

"It's getting clear that the government hopes to stabilize home prices while increasing the income of households," Zhu said, adding that "home prices are gradually returning to a reasonable level."

Zhu sees an 8-percent growth for China's economy next year.

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