Poll: Stimulus Impact On China’s Growth Is Fading


Regular Member
Sep 20, 2009
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The surge in China’s growth will continue to ease over the coming year as the initial impact of the massive government stimulus plan fades, a new poll of economists by The Wall Street Journal shows. The pace of expansion in China’s gross domestic product is expected to moderate to an annual rate of 8%-9% into 2010 from its peak of around 15% in the middle of this year, according to the survey.

Over the past week, we asked analysts for their estimates of China’s quarterly economic growth at a seasonally-adjusted annualized rate – that is, the same terms other major economies use. Although there is much uncertainty around these estimates, they can sometimes provide a better guide to changes in the trend than China’s headline figures.

China’s official figures for economic growth only show the change in its gross domestic product compared to a year earlier. The National Bureau of Statistics says the third quarter’s GDP was 8.9% higher than the same quarter last year, following a 7.9% gain in the second quarter. That seems to suggest a recovery that is gradually accelerating over the course of the year.

A very different picture emerges if the change in GDP is calculated relative to the previous quarter, and adjusted for seasonal factors. (China’s statistics agency has said it will start publishing quarter-on-quarter growth rates in 2010.)

The economists who responded to our poll all think growth slowed in the third quarter from the second quarter’s boom, with estimates centering on an annualized expansion of 10.1% in the third quarter after the second quarter’s 16.4%. “The slowdown in quarter-on-quarter growth is expected, because the strongest impact of the stimulus happened in the second quarter,” said Wang Tao, China economist for UBS, in a recent report. (See the results of our previous poll here.)

Economists’ estimates for each quarter varied widely, and they readily admit there’s a large margin of error in making such calculations for China. That wide range of variation reflects just how little public data on China’s economy professional forecasters have to work with, as well as uncertainty over the best procedure for making seasonal adjustments in a rapidly-changing environment.

But there is less difference of opinion among forecasters over the trajectory of growth: On average, our poll respondents expect the expansion to moderate further to 9.5% in the fourth quarter of this year, and then into the 8% to 9% range in 2010. That’s not far off China’s historical growth rate of 10%, the average of the last three decades. Although the government plans to continue stimulus policies into 2010, the additional growth such spending generates will be smaller since the economy has already improved substantially.

The People’s Bank of China has also recently started publishing their own, unofficial, estimates of seasonally-adjusted quarterly GDP growth. According the latest report on Friday (in Chinese here), growth slowed to an annualized rate of 8.7% in the third quarter (at the low end of the range of forecasts in our poll) from 14.9% in the second quarter. The central bank didn’t publish forecasts for future quarters.

A few forecasters are expecting a rockier path because of the ebb and flow of government stimulus spending: they think there will be a more pronounced dip in the first quarter of next year before a return to trend growth rates. Jun Ma, China economist for Deutsche Bank, says this “double dip” or “W-shaped” path is likely because the impact of the government stimulus will taper off before private-sector investment is completely ready to take up the slack.

Contributors to our survey include analysts on the staff of Bank of America-Merrill Lynch, Barclays Capital, Capital Economics, China International Capital Corp., Citigroup, Deutsche Bank, Goldman Sachs, the Organization for Economic Cooperation and Development and UBS, as well as the independent economist Albert Keidel.

–Andrew Batson


Respected Member
Senior Member
May 20, 2009
well, in fact , it is Chinese government that wants to cool chinese economy now, I think.

On surface, Chinese government still encourage people to invest more on.but in fact ,many people alread worry possible inflation and think it is time to brake the economy.


Regular Member
Oct 14, 2009
Not so quick, I think. The construction of high speed railways, building subways over 20 cities and reviving export will keep many people busy. Btw It was mentioned in CD that PLA may double its spending on hardware purchase next year.

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