UN report on 2009 economic prospects

We begin with the annual economic report just released by the United Nations. The report highlighted major challenges for China in its attempt to invigorate domestic consumption this year.

But the document also says the country remains the main engine for global growth this year.

In its report, the UN predicts a 0.5 percent decline in output in developed countries this year. In such a scenario, China's economy might slow to 8.4 percent.

However, it warns of the increasing likelihood of a more pessimistic scenario for 2009.

Major problems will be the prolonging of the global credit crunch and the deepening of the recessions in Europe and the United States.

However, the report points out that China remains a main factor for global growth.

It says the country contributed roughly 22 percent to the global economic growth in 2008, and will likely contribute more in 2009 as most developed economies are falling into a recession.

Experts say declines in external demand, corporate profits and household income will be major issues faced by the Chinese economy this year. And the slump in the real estate market is also a big concern.

Zhu Baoliang, Vice Director, State Information Center, said, "Currently there is a large volume of unsold houses, especially in coastal areas. If the sales stall continues, this may create more bad loans. But so far, our banking system is very solid and for the time being, such bad loans may not pose a very serious threat to the system."

China has launched a 586 billion US dollar fiscal package aimed at strengthening domestic demand over the next two years.

The UN report calls for massive economic stimulus packages that are coherent and mutually reinforcing on a global basis.

It also suggests stronger regulation of financial markets and institutions, as well as an overhaul of the international reserve system.

Category:

News & Politics

Tags:

• China
• economy
• financial
• crisis

[planettan]

China has plenty of rooms for growth per capita...

U.S. per capita growth has maxed out decades ago.

U.S. economy growth during entire Bush admin were ALL artificial (1) MILITARY spending, (2) Energy consumption, and the (3) housing industry subprime financing.

U.S. consumers already owe thrilions,... U.S. national debts= $11 trillion rapidly growing... middle class are taxed to their ears by (1) and (2) and no longer can affort (3)