China Central Bank Says Downturn Risks Rising
Monday, November 17th, 2008
The risks of an economic downturn in China are growing and protectionist sentiment abroad could hurt global growth, the country’s central bank said Tuesday.
“The impact of the international financial crisis is intensifying, and the uncertainty of the domestic economy is increasing. The risk of an economic slowdown is expanding,” the People’s Bank of China said in a quarterly report.
The central bank said it would make sure adequate credit is available to support the stimulus.
Growth in exports and industrial output have slipped as global demand for Chinese exports weakens. That has alarmed the country’s communist leaders because of the rising threat of layoffs and possible unrest.
The central bank warned of protectionist sentiment in reaction to the slowdown and said it might hurt global growth.
“With the slowdown of the world economy and rising unemployment, anti-globalization, represented by trade protectionism, is likely to exist for a long time,” the bank said. “It will cause a negative impact on the sustainable, healthy development of the world economy.”
In new signs of a slowdown, reports Tuesday said demand for electricity, a key indicator of industrial activity, and consumer demand for fuel have weakened.
Power consumption in October fell 0.46 percent from a year earlier, the first drop in several years, the official newspaper Economic Information Daily said, citing State Grid Corp., which runs most of China’s power-distribution network.
Fuel demand has weakened sharply since September due to the global financial crisis, the president of state-owned China National Petroleum Corp., China’s biggest oil company, said on its Web site.
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