Bank of China says China GDP may grow to 7.2% in Q2

BEIJING - The latest report by Bank of China predicts that China’s economy will stabilise in the second quarter of 2015, allowing GDP to rise from Q1’s approximate 7% to 7.2%. Senior economist with the bank’s Institute of International Finance, Zhou Jingtong, says in the report that despite a slowing Chinese economy in the “new normal” phase, “we are seeing a series of positive changes emerging from the recent economic moves, such as the rapid growth of private investment and strong profit growth in the equipment and high-tech manufacturing industries”.

A rising primary channel for employment is China’s tertiary (or service) sector: In the first two months of 2015, tertiary industry production increased by 7.4%. According to official statistics included in the report, each additional percentage point of GDP growth in 2014 created 1.79 million jobs.

Consumption also rose 11% in January and February 2015, an increase of 20 basis points from the same period in 2014. These trends are expected to further increase. Private investment and internet-related businesses are also expected to expand, while the housing market will likely remain in a relative trough “due to a lack of momentum for recovery”, according to Bank of China’s economists.  www.webershandwick.cn (ATI).