The World Bank estimates China's gross domestic
product for 2009 will be six-point-five percent, falling short of China's own
prediction of eight percent growth for the year. Still, the World Bank says
China's economy is holding up relatively well and it sees plenty of room for the
government to implement effective stimulus measures.
In a report released
Tuesday in Beijing, the bank says the estimate is significantly lower than
This comes as Chinese exports continued to decrease by
25 percent in February. And, the economic forecast for this year is generally
The World Bank predicts a 1.5 percent drop in global gross
domestic product for 2009.
World Bank officials were positive about the
fundamentals of China's economy and the effect of the Communist Party's $585
billion stimulus package. Louis Kuijs, the principle author of the World Bank's
quarterly update, says available data indicates the government stimulus package
"It's leading to increased financial flows. It's leading to
increased activity," said Kuijs. "And, it's leading to confidence effects,
sentiments that are all combined giving support for China's economy in this year
The World Bank estimates 75 percent of China's growth this year
will come from government-influenced spending.
Last week, Chinese Premier
Wen Jiabao called on China to do whatever is necessary to meet the government's
eight percent growth target. But the World Bank's Kuijs says, instead of
focusing solely on GDP expansion, China could work on strengthening the social
safety net, improving its service sector and growing domestic
"It may be just as appropriate to shift the focus, as much
as possible, to medium and long-term objectives and challenges, instead of a
very narrow focus on short-term growth objectives," added Kuijs.
most predictions by private-sector economists put China's 2009 GDP growth in the
five to eight percent range. This would mean China will continue to grow in a
year where many other countries will not, but it is a sharp decline from the
country's 13 percent expansion in 2007.