Economic Expectations for China Still Positive

China Economic Panel (CEP) by ZEW and Fudan University

(PresseBox) ( Mannheim, )
In September 2013 the CEP-Indicator of Economic Sentiment for China reaches 18.8 points displaying an ongoing positive sentiment. The CEP-Indicator of Economic Sentiment captures the expectations of financial market experts regarding the economic development in China over the course of the next twelve months. In September 63.9 percent of the surveyed experts expect the economic development in China to improve over the next twelve months, while 27.8 percent expect the economic perspectives to worsen. The Centre for European Economic Research (ZEW) in Mannheim and the Fudan University in Shanghai publish the results of the "China Economic Panel" (CEP) for the second time. CEP is a panel of experts focused on China. It serves to investigate the country's development in the world economy on the basis of a monthly survey of economic data.

China's current economic situation is also seen optimistic by the surveyed experts. Every second survey participant continues to assess China's current economic state as "normal". The share of optimists (31 per cent) noticeably exceeds the share of pessimists, represented by a group of 11.3 percent of analysts. This results in a balance of 12.7 points, which remains more optimistic than the balance for the Eurozone (minus 13.4 points).

The expectations for the GDP growth rate in China are projected at 7.6 percent in 2013 and 7.5 percent in 2014. During the next twelve months, 85.2 percent of the experts expect foreign direct investments of Chinese investors to grow further. For the same time horizon, the results show a continuing strong increase of companies' turnovers for all economic sectors, except the steel/metal sector (due to large overstocks) and the machinery/engineering sector, which is still suffering from weak demand caused by the world economic crisis.

"Financial market analysts expect the highest growth rate within China for the Shanghai region. The recently launched free trade zone there will increasingly attract foreign companies. They can profit from extensive liberalization as for example reduced business tax rates which are reduced from 25 to 15 percent", says Dr. Gunnar Lang, deputy head of ZEW's Research Department "International Finance and Financial Management".
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