CCER: China to see 10.6% GDP growth in Q4

"In 2009 Q4, China's GDP may grow by 10.6 percent and CPI may see a 0.5 percent growth," projected the China Center for Economic Research (CCER) at Peking University. This prediction has won the support of 21 institutions including the State Information Center (SIC), the Chinese Academy of Social Sciences (CASS), Morgan Stanley and the China International Capital Corporation (CICC).

Lian Ping, chief economist at the Bank of Communications, said that with the recovery of the overseas markets and the acceleration of China's domestic consumption, investment is expected to grow by over 30 percent in 2010, spurred by more central government-funded projects and higher enterprise confidence.

"Adequate liquidity in 2010 will support rapid economic growth," he said. Lian predicted that credit expansion would not contract greatly next year. New central government-funded projects, higher confidence in economic recovery and active housing and auto markets will contribute to a huge demand for new loans. Currently, deposit loan ratio in China's financial sector is around 67 percent, lower than the regulatory standard of 75 percent. Direct financing is also expected to speed up next year. Bond financing may exceed 1.5 trillion yuan and growing funds outstanding for foreign exchange will guarantee higher liquidity.

Zhou Qiren, a professor from the CCER at Peking University, noted that the private sector has had a better performance than stated-owned enterprises thanks to their relatively small scale and restructuring convenience, although private enterprises received fewer resources from the 4-trillion stimulus plan. "Private enterprises' proportion (in China's economy) will continue to grow," said Zhou.