China growth could halve due to Europe Crisis:IMF.

[Harry Potter]

China growth could halve if Europe crisis worsens:IMF
BEIJING | Mon Feb 6, 2012 8:33am EST

(Reuters) - China's annual economic growth could be cut nearly in half this year if Europe's debt crisis tips the world economy into a recession, putting pressure on Beijing to unveil "significant" fiscal stimulus, the International Monetary Fund said.

The Fund outlined its central scenario for China's 2012 growth outlook in its global outlook in January, cutting its forecast for 2012 growth from 9 percent to 8.2 percent.

The China Economic Outlook published on Monday showed that under the IMF's "downside" forecast for the global economy, China's growth rate may be cut by around 4 percentage points from the fund's current forecast of 8.2 percent in 2012.

"In the unfortunate event such a downside scenario becomes reality, China should respond with a significant fiscal package, executed through central and local government budgets," it said.

Stimulative measures could include cuts in consumption taxes, subsidies for consumers, corporate incentives to expand investment, fiscal support for smaller firms and more spending on low-cost housing social safety nets, the fund said.

Such fiscal stimulus, adding up to 3 percent of GDP, would help mitigate declines in economic output, it said.

A Reuters poll in January showed China's economic growth is likely to moderate to 8.4 percent from 2011's 9.2 percent as demand at home and abroad slackens.

Falling inflation will enable the People's Bank of China to fine-tune policy to support growth through its open market operations in the coming weeks, the IMF said. It said the central bank could opt to cut banks' reserve requirement ratio again if capital inflows remain subdued.

The central bank announced a cut in the amount of cash that banks have to hold as reserves -- the first such cut in three years -- at the end of November. More reserve ratio cuts are expected in coming months.

(Reporting by Kevin Yao; editing by Patrick Graham)

China growth could halve if Europe crisis worsens: IMF | Reuters
I very concerned about China's Economy.It could soon be on USSR's path.

 

[Harry Potter]

Feb. 7 (Bloomberg) -- China's stocks dropped the most in eight weeks on concern economic growth is slowing, while the euro fell as Greece sought to secure rescue funds. Australia's dollar rose after the central bank unexpectedly kept interest rates unchanged.

The Shanghai Composite Index tumbled 2 percent as of 2 p.m. in Tokyo, the biggest drop since Dec. 15. The MSCI Asia Pacific Index slipped 0.1 percent and Standard & Poor's 500 Index futures were little changed. The euro weakened 0.2 percent, while the Australian dollar added 0.5 percent. Bond risk in Japan fell to a five-month low. Copper declined for a second day.

China's industrial output growth is likely to slow from last year, Zhu Hongren, spokesman for the Ministry of Industry and Information Technology said at a press briefing in Beijing. The Reserve Bank of Australia left the overnight cash-rate target at 4.25 percent, a decision that was predicted by three of 27 economists surveyed by Bloomberg News.

"China is seeking steady growth this year, not high growth," said Wei Wei, an analyst at West China Securities Co. in Shanghai. "Europe is still mired in resolving its debt crisis and the process may be prolonged. Globally speaking, it's a year of slowdown."

Debt Talks

Greek Prime Minister Lucas Papademos plans to discuss with the nation's political leaders the implementation of additional fiscal measures needed to secure a second European Union-led bailout. While Papademos and the party chiefs already agreed to make further cuts this year equal to 1.5 percent of gross domestic product, they have yet to close gaps over measures demanded by creditors.

"A lot of boxes still have to be ticked before we have a positive result out of Greece," said Imre Speizer, a strategist in Auckland at Westpac Banking Corp., Australia's second-largest lender. "I have a bearish bias on the euro."

The yen fell 0.2 percent to 76.68 per dollar, weakening against most of its 16 major counterparts. Japanese Finance Minister Jun Azumi said he won't rule out any options to curb the currency's appreciation.

In the fourth quarter, Japan sold a total of 1.02 trillion yen ($13 billion) against the dollar in markets on the first four days of November in addition to 8.07 trillion-yen sale on Oct. 31, a report from the Ministry of Finance showed. Japan's currency climbed to a post-World War II high of 75.35 per dollar on Oct. 31.

Yen Intervention

"Japan has clearly shown its intention to stop a further appreciation of the yen, and there is a high chance" for more yen selling, said Hideki Shibata, a senior strategist for rates and foreign exchange at Tokai Tokyo Research Center Co. "Caution against intervention has increased in markets."

The cost of protecting Japanese corporate bonds from default dropped, according to traders of credit-default swaps. The Markit iTraxx Japan index declined four basis points to 151, Deutsche Bank AG prices show. The index is headed for its lowest close since Sept. 8, according to data provider CMA.

Five stocks fell for every four that rose in the MSCI Asia Pacific Index. Australia's S&P/ASX 200 Index dropped 0.5 percent, Hong Kong's Hang Seng Index lost 0.2 percent and Japan's Nikkei 225 Stock Average slid 0.4 percent.

SAIC Motor Corp. lost 1.4 percent. China's largest carmaker said sales dropped 8.5 percent from a year earlier to 380,305 vehicles last month, according to a statement yesterday.

Japan Tobacco Inc. jumped 5.7 percent. The world's second- largest listed cigarette maker raised its annual profit forecast as sales recovered sooner than expected after output disruptions caused by the March 11 earthquake. HTC Corp. slumped 6.4 percent. Asia's second-largest smartphone maker forecast first- quarter revenue that missed analyst estimates as it faces tougher competition in the U.S.

Copper for delivery in three months declined 0.5 percent to $8,459.50 a metric ton on the London Metal Exchange. Oil was little changed at $96.87 a barrel. Brent crude's premium to West Texas Intermediate widened a ninth day amid freezing temperatures in Europe.



--With assistance from Zhang Shidong in Shanghai.

Read more: China Stocks Fall on Economy Concern; Euro Weakens on Greece

 

[sweetgrape]

EU crisis will hit all the world, No one can be outside, The question, who can stand firmly??
And the enemies of the western should be careful, For shifting the public distraction, they will ignite the war. They done these many times!!!

 

[twocents]

EU financial crisis will negatively impact China and the rest of the world. It also is pretty obvious that the a Western media campaign is under way to scare China into bailing out the EU. It's for your own good, they say. They want China's help on their terms without quid pro quo.

 

[Rusty]

I think china should offer loans to Europe on the same conditions the Europeans did in the 19th and early 20th century. I'm sure then Europe won't be too eager.

 

[UKBengali]

China will grow a minimum of 8% this year, despite the Euro crisis.

A cash rich Chinese government can spend tons more money on roads, railways, bridges, powerstations etc. Even though the Chinese cities have superb infrastructure there is still a huge infrastructure gap in China when compared to other east Asian countries like Japan and South Korea.

Western losers still think they are more important than they are.

 

[below_freezing]

China will grow a minimum of 8% this year, despite the Euro crisis.

A cash rich Chinese government can spend tons more money on roads, railways, bridges, powerstations etc. Even though the Chinese cities have superb infrastructure there is still a huge infrastructure gap in China when compared to other east Asian countries like Japan and South Korea.

Western losers still think they are more important than they are.

Japan only has Sapporo, Tokyo and Osaka. South Korea only has Pusan and Seoul. A list of China's big cities would take at least 10 minutes to type.

Also, we have indigenous low cost Maglev technology now, not 1 cent of infrastructure stimulus will flow to foreign countries.

 

[canadian icehole]

Stating the obvious. A Euro crash will affect everyone. Well, maybe not that lost Brazilian tribe living in the forest.

 

[Kylin]

oh my, indians wet dream may come true
Naughty potter, have u been playing with ur wand again?

 

[jbond197]

^^^
Attacking Indians for posting the news is so cool but dealing with what IMF says is not my cup of tea!! Man, you will not always hear the news to your liking only, world is not ruled by CCP after all.. Quit attacking some body for posting news from a reliable source..

 

[ChinaToday]

^^^
Attacking Indians for posting the news is so cool but dealing with what IMF says is not my cup of tea!! Man, you will not always hear the news to your liking only, world is not ruled by CCP after all.. Quit attacking some body for posting news from a reliable source..

It takes one to know one LOL

 

[Holmes]

And another year of slowdown for global economy....