The World Bank said on October 6 in Singapore that it has cut the growth target forecasts for China to 7.4 percent in 2014 and 7.2 percent in 2015, as China pushes forward structural reforms to address financial vulnerabilities and structural constraints.
"Measures to contain local government debt, curb shadow banking, and tackle excess capacity, high energy demand and high pollution will reduce investment and manufacturing output," said a representative for the bank, regarding China's outlook.
However, Sudhir Shetty, the World Bank's Chief Economist in East Asia and the Pacific Region, claimed that China's slowdown in economy will be gradual and this does not represent the bottom falling out of China's growth. She added that the downward trend in China will not have a dramatic impact on other countries.
The World Bank proposed that China's structural reforms in sectors such as state-owned enterprises and services could help "offset the impact of measures to contain local government debt and curb shadow banking."
As to the property market, the bank said that "a major nationwide correction in real estate prices in China remains unlikely, although there may be pressure on prices in several of the less rapidly growing provinces." |