China facing bigger economic downside risk -- china.org.cn

Zhang Ping, minister of the National Development and Reform Commission, speaks at a press conference on China's economy in Beijing November 26, 2008. [China.org.cn]

The downside risk to China's economy is increasing, and some economic indicators deteriorated in November, said China's top economic planner on Thursday.

Deepening economic woes worldwide are casting a larger shadow on China, once the world's fastest growing major economy. Some major economic indicators have shown evident signs of worsening since the beginning of November, Zhang Ping, minister of the National Development and Reform Commission (NDRC) said during a press conference in Beijing.

Although Zhang did not detail those indicators, analysts said they include the gross domestic product (GDP), exports, capital investments, and the consumer price index (CPI).

China's GDP slowed to 9 percent in the July-September period, down from 9.9 percent in the second quarter. Many economists predict that the growth for the last quarter of 2008 could tumble to as low as 6 percent.

The worst has yet to come as the global financial crisis has not bottomed out, Zhang said.

Chinese enterprises, especially those export-oriented businesses, are experiencing growing difficulties, with some having been forced to halt or reduce production. "Without doubt, the situation will hurt employment," he said. Some workers have chosen to go back to their rural homes as the employers have shun down factories, he added.

With such a grave situation, China will continue to implement "strong and effective" fiscal and monetary instruments to check the slowing pattern, and yesterday's 108-percentage-points interest rate cut is one of the measures, Zhang said.

On Wednesday, China's central bank announced a massive cut of the benchmark interest rate by 1.08 percentage points, as part of the intensified moves to further stimulate domestic demand, and to give substantial support to enterprises, especially enterprises affected by worsening exporting circumstances.

(China Daily November 27, 2008)