Just in case you were hoping that China was going to stop New Zealand from going into depression.
Any prospect that China could be the growth engine to pull the world economy out of deep recession has been laid to rest by the latest World Bank forecast.
At the recently completed annual National Peoples Congress (NPC), Chinese Premier Wen Jiabao promised the regime’s policies would ensure 8 percent growth in 2009. The World Bank, however, cut its projection for this year to 6.5 percent, down from the previous 7.5 percent.
With the US, Europe and Japan all in recession, 6.5 percent sounds very positive. Reflecting the generally upbeat tone of the bank’s outlook, World Bank country director David Dollar, described China as “a relative bright spot in an otherwise gloomy global economy”.
The real situation and the scale of the economic slowdown in China, however, are underscored by the fact that 4.9 percentage points of the estimated growth will come from a massive government stimulus package. In other words, without the stimulus measures, the predicted growth rate would be just 1.6 percent—compared to 13 percent in 2007.