Forecasts for growth revised up

A number of economists and investment banks have revised up their forecasts for China's economic growth in the third quarter and the full year, research reports released Monday showed, following recent upbeat economic data.

In a research report sent to the Global Times Monday, Peng Wensheng, chief economist of China International Capital Corp, raised the forecast for China's GDP growth in the third quarter to 7.6 percent year-on-year from 7.4 percent previously, and for full-year GDP growth to 7.5 percent from 7.4 percent.

"Economic growth will maintain the momentum of month-on-month improvement in the short term, pushing up the year-on-year growth rate of industrial output and GDP in the third quarter, but the rebound will be restricted by the unbalanced economic structure," Peng said in the report.

In another report sent to the Global Times Monday, Zhu Haibin, chief China economist at JP Morgan Chase & Co, lifted the year-on-year growth projection for the third quarter to 7.6 percent from 7.4 percent and the whole-year GDP growth forecast to 7.6 percent from 7.4 percent.

China's official manufacturing Purchasing Managers' Index (PMI) and HSBC's manufacturing PMI have both risen recently, along with an improvement in other economic data, which suggests that economic conditions are improving, Zhu said.

The downside risk to economic growth will be lower in the near term, he noted.

The latest positive data came Monday when the final reading for August of HSBC's PMI, a performance gauge of small and medium-sized manufacturers, rose to 50.1, up sharply from the previous month's final reading of 47.7 and the highest level in four months.

The official PMI released by the National Statistics Bureau Sunday also showed manufacturing activity accelerated at the fastest pace in 16 months, with the index rising to 51.0 in August from 50.3 in July.

On August 26, Deutsche Bank raised its projection for China's GDP growth in the third quarter to 7.7 percent year-on-year from 7.5 percent and for second-half growth to 7.7 percent from 7.6 percent, following a raft of positive economic data for July and HSBC's better-than-expected preliminary reading for August PMI.

Also on August 26, Credit Suisse revised its forecast for China's whole-year growth to 7.6 percent year-on-year from 7.4 percent.

"The recent positive economic data indicates that China's economy is stabilizing, with a series of government policies to boost the economy beginning to take effect," Zhang Liqun, a research fellow at the Development Research Center of the State Council, told the Global Times Monday.

"But economic stability does not mean the difficulties facing the country's small and medium-sized firms will disappear," Zhang said.

The recent government policies were intended to ensure that economic growth does not slow down further, but economic restructuring and reform are still high on the policy agenda, said Zhu at JP Morgan Chase & Co.

Economic reform will proceed further, especially after the Third Plenary Session of the 18th Communist Party of China Central Committee, which is slated to be held in November, Zhu noted.