BEIJING — China will be able to achieve economic growth of around 5.5% in 2022, an adviser to the government’s cabinet said on Friday, making a rosier prediction than markets expect as recent data have pointed to slowing momentum.
The world’s second-largest economy cooled over the course of last year and faces multiple headwinds as a property downturn hurts investment and China’s efforts to contain local cases of the highly contagious Omicron variant of COVID-19 weigh on consumption.
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That has prompted policymakers to roll out an array of support measures, including Friday’s cut by the central bank in the rate on standing lending facility (SLF) loans by 10 basis points, a day after it cut benchmark lending rates.
Friday’s comments by Zhu Guangyao, a former vice finance minister, are more optimistic than those from private economists.
A Reuters poll of analysts published on Jan. 13 forecast China’s economy would grow 5.2% in 2022.
The government will unveil a growth target for 2022 at the opening of the annual parliament meeting in early March.
“I’m confident that China’s economic growth will be around 5.5% in 2022,” Zhu told a media briefing, adding that the potential economic growth rate was estimated at 5-6%.
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Li Yang, former vice president of the Chinese Academy of Social Sciences, a top government think tank, said China has policy space to support the economy.
China was restrained on monetary policy and fiscal policy in 2021, leaving some space for this year, Li said during the same event on Friday hosted by China’s State Council Information Office.
On Thursday, Premier Li Keqiang said China will take more “practical and concrete measures” to boost effective demand and stabilize market expectations, state media reported.
China’s cabinet has pledged to speed the issuance of local government special bonds to boost investment, while the finance ministry has issued 1.46 trillion yuan ($230.26 billion)in the 2022 advance quota for local special bonds.
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STABILITY KEY
Chinese policymakers, however, have ruled out “flood-like” stimulus for fear of reigniting debt and property risks.
China’s economy expanded 8.1% in 2021, the fastest in a decade due partly to the low base from 2020 when COVID-19 jolted the economy, comfortably beating an official target of “above 6%.”
Last year, Chinese policymakers focused on curbing property and debt risks, exacerbating the slowdown, but have eased back somewhat so as not to fuel job losses ahead of a key Communist Party Congress late this year.
Zhu also said that expected interest rate hikes by the U.S. Federal Reserve could have a big market impact, Zhu said, and said that the United States should strengthen its policy coordination with emerging economies, including China.
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“We hope the United States could change the idea that ‘the dollar is our currency, but your problem’, and truly strengthen its policy coordination with other countries, especially developing countries and emerging market countries,” Zhu said.
Li said the expected Fed tightening could trigger capital outflows from developing countries, with some already feeling the pressure.
The impact on China’s economy will be contained by its controls on capital flows and a managed-float yuan exchange rate, Li added.
Economists polled by Reuters expect the Fed to raise its key interest rate three times this year, tightening policy at a much faster pace than thought a month ago to tame persistently high inflation.
($1 = 6.3406 Chinese yuan renminbi) (Reporting by Kevin Yao; Editing by Raissa Kasolowsky and Louise Heavens)
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
