AN AUSTRALIAN VIEW OF CHINA

STEVENS SEES CHINA MATCHING U.S. IN DECADE ON 7.5% GROWTH

Michael Heath and Fion Li,

Bloomberg-Business Week, March 19, 2012

China’s lower growth target will still allow one measure of its gross domestic product to exceed the euro area in a few years and match the U.S. economy in a decade, Reserve Bank of Australia Governor Glenn Stevens said.

“The slowdown in Chinese growth -- from 10 percent to a mere 8 percent! -- is a major talking point, and some see it as portending a major crash,” Stevens said in a speech in Hong Kong today. “But some slowing was required to reduce inflation and, therefore, put growth on a more sustainable path.”

Stevens’s confidence in China was underscored by the RBA’s decision to pause interest-rate cuts in the past two months even as Australia’s economy grew at half the pace forecast by economists in the final three months of 2011 and unemployment rose last month for the first time since August. The currency has strengthened this year, propelled by a A$456 billion ($484 billion) pipeline of resource projects by companies such as BHP Billiton Ltd. (BHP) to meet Chinese demand.

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