22nd Feb 2012,Wedenesday
A property sector downturn and slumping global demand may knock China's economy into a hard landing in 2012, a senior government economist told Reuters, putting more pressure on Beijing to speed up economic reforms and to open up the market.
The economy is not just slowing but is also haunted by over-investment that could constrain Beijing's options, said Shi Xiaomin, vice president of China Society of Economic Reform (CSER), a Beijing-based think-tank.
"A hard landing of the economy is possible this year as slackening domestic and external demand pushes (full-year) GDP growth below 8 per cent, probably even to 6-7 per cent," said Shi.
"More worrying is that such a slowdown is going hand in hand with a sharp decline in the overall economic efficiency."
The world's second-largest economy may even slip into a period of deflation late this year or next year, he added.
Shi is an adviser to the government, specialising in reform. His think-tank is under the under the National Development and Reform Commission, China's top economic planner.
Fears of a hard landing in China have gained traction as a stream of recent data, especially disappointing trade and credit data in January showed the turbo-charged economy is faltering.
China's manufacturing sector contracted in February for the fourth straight month as new export orders dropped sharply in the face of the euro area debt crisis, the HSBC flash purchasing managers index showed on Wednesday.
Shi's outlook is a contrarian one in China. Most government economists don't expect a hard landing, which in the Chinese context is typically defined as a sudden dip in quarterly GDP growth below 8 per cent, which could lead to big job losses that pose a threat to social stability.
A property sector downturn and slumping global demand may knock China's economy into a hard landing in 2012, a senior government economist told Reuters, putting more pressure on Beijing to speed up economic reforms and to open up the market.
The economy is not just slowing but is also haunted by over-investment that could constrain Beijing's options, said Shi Xiaomin, vice president of China Society of Economic Reform (CSER), a Beijing-based think-tank.
"A hard landing of the economy is possible this year as slackening domestic and external demand pushes (full-year) GDP growth below 8 per cent, probably even to 6-7 per cent," said Shi.
"More worrying is that such a slowdown is going hand in hand with a sharp decline in the overall economic efficiency."
The world's second-largest economy may even slip into a period of deflation late this year or next year, he added.
Shi is an adviser to the government, specialising in reform. His think-tank is under the under the National Development and Reform Commission, China's top economic planner.
Fears of a hard landing in China have gained traction as a stream of recent data, especially disappointing trade and credit data in January showed the turbo-charged economy is faltering.
China's manufacturing sector contracted in February for the fourth straight month as new export orders dropped sharply in the face of the euro area debt crisis, the HSBC flash purchasing managers index showed on Wednesday.
Shi's outlook is a contrarian one in China. Most government economists don't expect a hard landing, which in the Chinese context is typically defined as a sudden dip in quarterly GDP growth below 8 per cent, which could lead to big job losses that pose a threat to social stability.
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