Mainland China’s economic growth could drop as low as 3.7 per cent, but it’s not very likely
Bank of America Merrill Lynch says probability of hard landing about 5 per cent
Mainland China’s gross domestic product growth could slow to as little as 3.7 per cent this year in a worst-case scenario outlined in a detailed report by Bank of America Merrill Lynch.
It comes after billionaire investor George Soros said last month that a hard landing for the Chinese economy was “inevitable”, due to rapidly expanding debt.
“I’m not expecting it, I’m observing it,” he told Bloomberg. “China can manage it. It has resources and greater latitude in policies, with US$3 trillion in reserves.”
But how likely is a catastrophic plunge in the mainland economy? Should investors be expecting an imminent plunge in the world’s second-largest economy?
In response to Soros’s remarks, mainland state media outlets, including the Communist Party mouthpiece People’s Daily and the state news agency Xinhua, hit back hard. “Why are so many Western pundits and media outlets so intent on talking China down?” the Global Times asked last month.
Still, economists are not saying it is not impossible. A report by Bank of America Merrill Lynch this month laid out a series of projections for mainland economic growth, depending on the actions taken by government and how the global economy behaves.
