Int'l financial institutions raise forecasts for China鈥檚 economic outlook

Just before the National Bureau of Statistics will release July's macro-economic data on August 10, several global financial institutions raised their forecasts for China's economic growth.

Standard Chartered Bank Ltd (SCB) had projected a 7.4 percent economic growth this year and 8.0 percent next year in June. But because of the economic data of the second quarter released July 16 which shows signs of a rebound, on Tuesday SCB raised its forecast to 8.5 percent this year and 8.9 percent next year.

Earlier, the World Bank has raised its forecast for China's economic growth from 6.5 percent to 7.2 percent in June, and JP Morgan lifted its forecast from 7.2 percent to 7.8 percent in June and then to 8.4 percent in late July.

They believe China's economic expansion has achieved positive results. Further economic restructuring and stimulating consumption are key factors for global economic growth.

Nicholas Kwan, Chief Economist and Regional Head of Research, Asia at SCB noted that China's exports are unlikely to rally in a short time, but its imports are recovering. Domestic consumption will increase dramatically, serving as a drive for the economic recovery.

However, China is also faced with challenges of inadequate private investments, insufficient development of small- and medium-sized enterprises and improper industrial structure, he added. The main problem is that liquidity is not equally distributed in China.

Kwan said, at present, the question is not how much China's economy recovers but how well it recovers.

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