Boston, MA -- (SBWIRE) -- 10/10/2014 -- Core Views

As evidenced by strong rhetoric regarding its economic growth target in 2014, Beijing is likely to continue to implement targeted stimulus measures in order to avert a more acute economic slowdown. As a result of what we expect to be a balance between short-term stimulatory measures and longer-term economic reforms, we have upgraded our 2015 real GDP forecast to 6.7% from 6.0% previously. At the same time, we see the economy achieving a 7.3% rate of growth in 2014, versus our previous forecast of 7.1%.
The Chinese government's official investigation in Zhou Yongkang is a major split from past precedent, and will likely be the zenith of Xi Jinping's anti-corruption campaign. The campaign has also served as a purge to eliminate hostile political forces, and we believe that it will pave the way for Xi to enact more aggressive economic reforms over the coming years.

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Major Forecast Changes

Following the Chinese yuan's recent appreciatory run, we have upgraded our end-2014 and end-2015 forecasts on the unit to CNY6.2000/USD and 6.2500/USD, respectively, from CNY6.3500/USD and CNY6.4000/USD previously. That said, we continue to see downside forces acting against the currency, as the PBoC may look to utilise the currency as a stimulatory tool in the face of a slowing economy.

Key Risks To Outlook

A key downside risk to our economic outlook remains another collapse in external demand, such as the one that occurred at the height of the global financial crisis. This would seriously undermine growth in trade-dependent industries and hasten a fall in the property market, potentially leading to an outright recession. There is also a risk that greater-than-expected fiscal and monetary stimulus by government and the People's Bank of China could usher in stagflation.
A hard-landing scenario is also a key risk in China, as falling property prices amid rising domestic debt levels could set the stage for a financial crisis. While we believe that this...

The China Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in China and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of China's economic, political and financial prospects through end-2018, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

Forecast the pace and stability of China's economic and industry growth through end-2018.
Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
Contextualise China's country risks against regional peers using BMI's country comparative Risk Rankings system.
Evaluate external threats to doing business in China, including currency volatility, the commodity price boom and protectionist policies.

The China Business Forecast Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Business Environment and Key Sector Outlook.

Economic Outlook:

How will the China economic policy-making and performance impact on corporate profitability over 2014-2018?

BMI provides our fully independent 5-year forecasts for China through end-2018 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The China Business Forecast Report features BMI's forecasts with supporting analysis for 2014 through to end-2018, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
BMI's comprehensive Risk Rankings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
Balance of Payments - trade and investment, current and capital account.
Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.


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