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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (36854)	8/1/2003 11:44:33 AM
From: RealMuLan	Read Replies (1) \| Respond to of 74559

Overheated China set to cool , denting Asia - UBS SINGAPORE, Aug 1 (Reuters) - China's overheated economy is likely to slow markedly over the coming year, taking a big chunk out of Asian export growth, investment bank UBS said on Friday. Jonathan Anderson, UBS's chief Asia Pacific economist, said China had grown at a 12-13 percent pace over the past year based on his expenditure estimates, well above official GDP growth rates of around eight percent. "China is clearly rising like a rocket. China is equally clearly overheated, and I'm very very sure we're going to see a downturn in the next 12 months," Anderson said in a presentation to the firm's clients in Singapore. "Our baseline scenario is for next year's GDP growth probably to slow to seven-eight percent based on expenditure estimates and perhaps even drop below that in 2005 as the economy begins to cool off," he said. As a result, Anderson expects China's current import growth rates of around 40 percent to slow to around 10-15 percent within 12 months. "Yes, China has an enormous demand for commodity imports, but the growth we've seen in the last 12 months is truly overheated," Anderson said. forbes.com Facing Up To the China Challenge By Steven Pearlstein Friday, August 1, 2003; Page E01 ... But Clyde Prestowitz, a recovering Japan-basher who heads the Economic Strategy Institute, says the parallels between China and Japan are overdrawn. Unlike Japan, he notes, China has welcomed foreign direct investment. And while it is running a huge trade surplus with the United States, China's overall trade is in balance, with imports rising faster than exports. Other China experts, like Nick Lardy of the Institute for International Economics, note that most of the production now being shifted to China is coming not from the United States but from other countries in Asia and Latin America. Unfortunately for us, while Mexico would turn around and spend 60 cents of every export dollar buying something from the United States, China tends to spend only 20 cents. ... washingtonpost.com