Market Report-China Economy Woes

CHAN:
In our market report today, let's take a look at how China is faring in the global economic downturn. Here's this special report.


STORY:
A top planner from within China says the economy has deteriorated faster in November than previous months, warning that the grim job market might stir social unrest.

[Zhang Ping, Chairman, National Development and Reform Commission]:
"The global financial crisis has not bottomed out yet. The impact is spreading globally and deepening in China. Some domestic economic indicators point to an accelerated slowdown in November."

The State Information Centre, a think-tank connected to the Chinese Communist Party, forecast on November 27 that annual gross domestic product growth would slow to 8.0 percent this quarter from 9.0 percent in the third quarter due to weak imports and a slump in the property market.

Zhang also warned that excessive bankruptcies and production cuts might lead to massive unemployment and stir social unrest.

With factory closures spreading, especially in the export sector, laid-off workers protested this week against low compensation in three Chinese provinces.

And a clear sign of the regime's concern over the economy is its slashing of interest rates this week. On November 26, the People's Bank of China cut banks' benchmark lending rates by 1.08 percentage points, the deepest cut since the Asian financial crisis in 1997.

The central bank's actions are aimed at reinforcing the stimulus imparted by a 4 trillion yuan ($586 billion) fiscal package unveiled on Nov. 9 aimed at boosting domestic demand over the next two years.

Asia stocks rose for a fifth day on Thursday, helped by hopes that policymakers' efforts will ultimately prevail after the surprise and aggressive rate cut from China.

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News & Politics

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