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The Chinese economy is headed in the right direction, but the foundations of the recovery are not yet solid, Su Ning, a vice-governor of the People's Bank of China, said on Tuesday.
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Photo by: Cory Doctorow Shanghai |
Speaking at a mergers and acquisitions conference, Su said he hoped China would be the first major economy to emerge from the global crisis.
"The overall situation is stabilizing and moving in the right direction," he said.
But he cautioned that the pick-up was still not firmly anchored and expressed particular concern about the "grim" international environment for Chinese exporters as the two-year-old financial crisis continues to take a toll on global growth.
The World Bank also cited poor prospects for exports -- and for private investment -- when it cautioned last week that a rapid, broad-based recovery was unlikely even as it marked up its forecast for 2009 GDP growth to 7.2 percent from 6.5 percent.
A clutch of banks, including Standard Chartered, Barclays Capital and Royal Bank of Canada, have also raised their forecasts for China's gross domestic product growth in the past week following statistics for May that, except for trade, were generally robust.
The May data showed the economy benefiting from a 4 trillion yuan ($585 billion) government stimulus package as well as a loose monetary policy that has led to a burst of money and credit growth.
In the first five months of the year, banks extended a record 5.84 trillion yuan in loans, exceeding the minimum target set by the government of 5 trillion yuan for all of 2009.
"It has provided a very good environment for companies to overcome their difficulties and for the economy to adjust," Su said of the central bank's monetary setting.
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