The World Bank says it expects China's economic growth
will slow to its lowest point in nearly two decades - as the
global financial crisis continues to take a toll on the world's
fourth largest economy. Stephanie Ho reports from Beijing.
The World Bank is predicting China's economic growth
rate for 2009 will slow to seven-point-five percent. This
number is nearly two points lower than China's expected growth
rate for this year, of nine-point-four percent.
World Bank economist Louis Kuijs says China's downturn will
worsen in the first half of next year largely because of
weakening export demand.
Although there is no way to make China fully immune, Kuijs says
the Chinese government can take steps to help minimize the
effects of the global crisis on the country.
"We are seeing a weak external sector, we're seeing a rather weak private sector demand in general, but we are seeing a government that steps in and that is trying to do everything it can to keep growth at a decent rate, and has the financial means and, we would say, the administrative capacity to make that happen.
China recently announced a multibillion dollar stimulus plan,
which calls for injecting money into the economy through
spending on construction, tax cuts, and aid to the poor and
World Bank China representative David Dollar applauded the
package, saying more spending on social programs and aid to the
poor in the countryside should help boost growth.
In a separate issue, Dollar said the lending agency and the
Chinese government are in initial talks about providing
financing for loans to other developing countries.
"The World Bank group is talking to China about ways in which
it could contribute some additional financing of the World Bank
group that will help developing countries."
The World Bank forecast is in line with projections by
investment banks, which have cut their China outlook several
times, as global conditions worsen.