(Yicai Global) Oct. 10 -- China’s economic growth will remain stable this year, heads in financial decision-making anticipate.
Chief economists expect the average growth rate of China’s gross domestic product to be 6.67 percent this year, findings of financial media outlet China Business Network’s survey shows. The estimate was 6.66 percent at the end of June, which was almost the same as the country's official number of 6.7 percent growth for the second quarter.
Some 19 participants out of 23 expected the GDP to rise at a slower pace of 6.4 percent in the third quarter ending this month. China sees a decelerated growth in both imports and exports as the adverse impact of the China-US trade friction increases, said Xu Hongcai from the China Center for International Economic Exchanges.
What needs to be done is boosting domestic demand and expanding consumption and investment, Xu added. One of the government's next possible moves is to lower companies' income tax, the economists said. The survey respondents also predicted that the government may deepen the value-added tax reform again this year -- as it will next month -- to alleviate burdens on companies.
Almost all of the participants forecasted that benchmark deposit and loan interest rates will remain unchanged. They also said that the People's Bank of China may reduce lenders' reserve requirement ratio again this month after the previous announcement on Oct. 7 which should release about CNY1.2 billion (USD175 billion) in liquidity.
Economists also estimate that the average exchange rate of the yuan against the US dollar will be 6.87 later this month and 6.89 at the end of this year. The redback traded slightly weaker at 6.9206 today at 4.22 p.m., according to Bloomberg.
Higher US bond yields and lower RRR will increase the pressure on the yuan's depreciation in the short term, but it is not a massive concern, said Pan Xiangdong from New Times Securities.
Despite the easing policies, the government's control has its place in the reform, according to one participant. Improper regulation may open a big monetary floodgate and result in a huge bubble, said Guan Qingyou from the China Academy of Financial Research.
Editor: Emmi Laine