Fidest – Agenzia giornalistica/press agency

Quotidiano di informazione – Anno 34 n° 316

Expert comment on China’s latest GDP data due to be released tomorrow

Posted by fidest press agency su sabato, 16 aprile 2016

Kamel Mellahi expert comment on China’s latest GDP. Kamel Mellahi, of Warwick Business School, is a Professor of Strategic Management and researches business in China.Professor Kamel Mellahi said: “The slew of economic data coming out of China recently points to a mix of bright spots and areas of concern. A host of key economic indicators are pointing upwards. Exports are up, capital outflow seems to be under control, there is plenty of evidence of robust growth in the service sector, and the pulse of the real estate sector is starting to beat faster. The moribund manufacturing sector is weakening, but this is widely expected. There are no shortage of reasons to be cautiously optimistic about the performance of the Chinese economy.”The new economic data may be knocking the wind out of the argument that the Chinese economy is heading for a hard landing, but I believe it’s premature to think that the economy is bottoming out. It’s far too early to start talking about a V-shaped recovery. Sure, there are plenty of bright spots but there are some genuine areas of concern. Painful reforms are still required to deal with the looming debt crisis, the power and influence of some large state-owned enterprises, and over-capacity in a number of sectors.”The Chinese economy may be hitting a soft patch, but there is still plenty of road bumps ahead. Overall, the structural reforms are heading in the right direction but so far they haven’t gone far enough. Dealing with zombie firms is going to be a thorny process, while the share of debt held by firms is still rising. The measures put in place to deal with this so far do not seem to be very effective.”That said, China has the financial fire power to manage the enormous volume of debt at risk. Plus, the rhetoric does not seem to be matched by concrete actions when it comes to credit support for struggling state-owned enterprises. This may end-up compromising the long-term economic rebalancing strategy.”


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