CHINA’S SLOWDOWN

SIGNIFICANT SLOWDOWN IS LIKELY IN CHINA: ROUBINI

Bloomberg

Taipei Times, January 22, 2012

China’s economy will slow this year, prompting policymakers to reduce interest rates and loosen lending restrictions, said Nouriel Roubini, the economist who predicted the 2008 financial crisis.

“It’s going to be a significant growth slowdown this year,” Roubini, co-founder of Roubini Global Economics LLC, said in a Bloomberg TV interview yesterday.

“Housing is deflating. Export growth is slowing down. If they don’t do something — stimulus in monetary and fiscal credit — the risk is that the growth will slow down well below 8 percent,” he said.

China’s GDP increased 9.2 percent last year, matching the slowest pace since 2002, as the housing market cooled and the European debt crisis eroded export demand.

The central bank cut the amount banks must keep in reserve last month for the first time in three years and the government has allowed its five biggest banks to boost first-quarter lending and may relax capital requirements, people with knowledge of the matter said this week.

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