GROWTH SLOWDOWN IN CHINA

CHINA THINK-TANKS SHAKE INVESTOR CONFIDENCE

The first-quarter growth forecast had been cut to around 8 per cent from 8.5 per cent.

AFP

Asia One, March 23, 2012

BEIJING - When two of China's most influential government policy think-tanks highlight the risk that growth will weaken on the same day that a widely-watched indicator fails to signal an expected upturn, investors are naturally nervous.

The question is whether a warning by the cabinet's Development Research Centre of the need to prepare for "extreme risks", a State Information Centre assessment growth is slowing faster than thought and a slip in a private sector survey of factory activity signal a significant shift in the economy.

Adding in a risk-laden assessment from a third government think-tank in 24 hours suggest at the very least that investors should be erring on the side of caution given that growth has slowed for four successive quarters and almost certainty slowed again for a fifth.

"If the government does not intervene and accelerate policy easing, growth will continue to slow," is the blunt assessment of Wang Jun, an economist at China Centre for International Economic Exchanges (CCIEE).

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