A mild slowdown in the US economy would help China cool off its
red-hot growth and avoid a much-feared hard landing, said a senior
economist at US-based Global Insight, an economic and financial
analysis provider.
"A mild economic slowdown in America could help China, which is
currently trying to cool down its economy," said Nariman Behravesh,
Global Insight's chief economist.
Behravesh dismissed fears that a slowing US economy, which is
China's main export destination, would have a wholly negative
impact on China. In fact, it might help slow China's economy and
force it to turn to domestic consumption.
The US economy had a blistering start to the year with 5.5
percent growth in the first quarter.
The economy, however, has been losing momentum. It slowed to 2.6
percent growth in the second quarter and a meagre 1.6 percent in
the third.
Behravesh predicts the US economy will grow 3.3 percent this
year and slow to 2.4 percent next year.
"China could weather the storm (of a slowing US economy) as it
now has many sources of growth," he said, pointing to its
construction boom, and diversified export destinations.
"Actually, the mild slowdown could help China cool off its
economy and avoid a hard landing," Behravesh said.
China's economy surged 11.3 percent in the second quarter, its
fastest pace in a decade.
It grew 10.7 percent in the first three quarters of this
year.
The Chinese Government has tried a number of control measures to
rein in the economy.
Behravesh, named as a top economic forecaster by USA Today in
2004, expects China to register 9.2 percent annual growth in its
gross domestic product next year and 8.5 percent in 2008.
The Global Insight economist said China should boost domestic
consumption to spur economic growth and press ahead with financial
reform.
The Boston-headquartered Global Insight last year bought a 25
percent stake in the China Economic Information Network, the
country's primary economic data provider, as the US firm is moving
aggressively to beef up its presence in China.
The information company now has one office in Beijing and one in
Shanghai.
It achieved more than US$100 million in revenue last year.
(China Daily November 28, 2006)