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Spillover of China's economic slowdown 'exaggerated': Goldman Sachs

By Gao Yinan (People's Daily Online)    16:52, February 01, 2016
Spillover of China's economic slowdown 'exaggerated': Goldman Sachs
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2016 kicked off with a financial market and commodities rout over worries about the global economic outlook. China's economic growth slowed to a 25-year low of 6.9 per cent in 2015, causing major concern for investors around the world about spillover effects of China's economic slowdown.

The spill-over effects of a slowing Chinese economy are overwhelmingly exaggerated and China's economy can still maintain a high growth rate, according to economic experts at Goldman Sachs in Beijing.

The negative effect of China's economic slowdown on the global economy, especially in developed economies has been exaggerated according to Goldman Sachs’ chief economist Jan Hatzius, who spoke at the China Macro Economic Forum on Jan 29 in Beijing.

He said that on one hand, China has limited risk exposures to trade in the United States and most countries in the euro area; on the other hand, the correlation between China's financial system and that of the United States and European countries is also weak. Therefore, the spillover effects of China's economic slowdown are limited in terms of the two major transmission channels-- trade and finance.

Even in such hypothetical situations as the Chinese domestic consumer demand growth slowing a further 2 percentage points and the RMB exchange rate continuing to depreciate, the impact on the US and European economies would at most be about 0.2 and 0.3 percentage point, said experts in Global Investment Research at Goldman Sachs.

Goldman Sachs predicted that China's economic growth will slow to 6.4% this year and 6.3 percent next year. But China is still able to maintain medium-to-high speed of growth. 

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Editor:Gao Yinan,Wu Chengliang)

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