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Analysis: China to Enjoy Accelerating Growth in 2001
China is expected to enjoy still-accelerating earnings and economic growth in 2001, though the momentum has been negative overall in Asia, economists said Wednesday, November 29.
"World economic growth peaked in 2000 and will begin to slow down in 2001, but a sustainable and more balanced development will be seen in China, Joseph Tang, head of research for Sun Hung Kai & Co. Limited said during a half-year market review and forecast media presentation.
Presenting the market outlook for 2001, Tang said, "the roller-coaster investment ride in the year 2000 will slow down as we enter 2001 and the main opportunities are to be seen in China."
The Hong Kong-based magazine Economist Intelligent Unit estimated that the world economic growth rate will decline to 4 percent in 2001 from 4.9 percent in 2000.
Commenting on a research on prospects 2001 by the Salomon Smith Barney (SSB) Wednesday, Han Ong, head of SSB's Asia-Pacific Equity Strategy, said: "unlike the rest of Asia, China is expected to enjoy still-accelerating earnings and economic growth in 2001 along with a strong domestic demand."
This is consistent with positive consensus earnings momentum, Ong said. On its way to the WTO, China is carrying out banking and capital market reforms in order to raise competitiveness, Ong added.
China's reforms of the state-owned enterprises is also close to its final stage, with market leaders such as PetroChina and China Mobile beginning to benefit from industry consolidation, the economist said.
Analyzing the key investment themes in China, Tang said a pooling system in the power sector is already being developed and consolidation of local airlines into three main groups will be seen. Deregulation within telecommunications sector will result in new cellular licenses and integration of the cable telecom networks, he said.
Expecting a revival of domestic consumption in the country, Tang said this will manifest itself primarily in the private housing sector, in particular in light of the government's policy incentives and in demand for both durable and non-durable goods, resulting from a cheaper and wider choice of imports.
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