Comments of concern around global growth from the Organisation for Economic Co-operation and Development (OECD) motivated markets to begin the new trading week under selling momentum.
Advertisement
The OECD urged Monday nations to step up environmental investments to ward off not only catastrophic climate change but to give the global economy a much-needed boost as China struggles to rebalance its economy. Electronics would also be hit, shrinking 1.13 percent.
The government should impose a series of measures, including tax reductions, to lessen companies’ burdens and stabilize the economy, Premier Li Keqiang said on Tuesday.
The risk pertaining to China’s economy has gone down significantly in the last two to three months. It has also lived out the possibility of a potential interest rate rise. “Market participants are of the view (after strong U.S. jobs data on Friday) that the worries about the global economy are overdone but then this weekend we saw a few disappointment in the China exports”, said Emile Cardon, a strategist at Rabobank in the Netherlands. Alibaba Group Holding Ltd.’s annual Singles’ Day promotion, a shopping- campaign twist on Valentine’s Day, exceeded the 57.1 billion yuan ($9 billion) 2014 level before midday. The government should also redirect a few of the country’s resources to small and medium cities for better public services, the expert added.
China’s President Xi Jinping said last week that China needed to maintain annual economic growth of at least 6.5 per cent over the next five years to realise the country’s goal of doubling 2010 GDP and per capita income by 2020.
Aside from stressing innovation, coordinated and inclusive development, which are mainly aimed at resolving domestic development issues, the proposal also highlights green growth and further opening up, reflecting China’s genuine desire for a cleaner and more prosperous future not only for itself but for the whole world.
The hoped-for growth in both developed and emerging markets has not materialized – and China, one of the main sources of global growth in the past few years, is showing worrying signs of further disappointing. A rising dollar will impact the USA economy, but we should not overlook the fact the U.S.is not an export driven economy as exports represent only about 14 percent of the total economy. The economy is recovering quite well and in the long term, it is expected to shine like before.
However, a few analysts believe that the country’s manufacturing data results aren’t too glossy.
Advertisement
The future is still uncertain, however, economist and analysts need to pick out the positives from the current scenario and build on it. Being the world’s second largest economy, China is important to world and due to its high demand for goods produced around the globe, every country prays for the betterment of its economy.
