Even as the financial storm rages across the world, the mainland will still be able to maintain its GDP growth at 7.5 percent in 2009, said Wang Qing, Morgan Stanley chief economist for Greater China.

He added that Hong Kong economy is expected to recover rapidly from the slowdown with help from the central government.

Wang strongly believed that the mainland economy is unlikely to slide into recession next year amid the worsening financial market.

"The economic growth depends largely on local property market," he said."Although the housing sector remains sluggish, the recently-released measures can stabilize the market to buoy the country's economic growth."

CCB International managing director and head of research Peter So praised the central government for unveiling a string of measures to boost domestic consumption.

Given the mainland's consumption only accounts for less than 50 percent of its GDP, which is very low as compared with the level of the US, it is wise for the central government to spur domestic consumption in fueling economic growth, he said.

Barclays Capital head of China research Peng Wensheng said that the mainland economy moved from overheating to hard landing over the past months.

Although the central bank has loosened its grip on monetary supply in view of market volatility, Peng said the central government should press ahead and encourage lending by local banks.

However, Wang pointed out, that the easing monetary policy might lead to deflation next year. A drop in food prices, however, can help people. And the central bank still has room to increase market liquidity.

He also predicted that the yuan will remain stable in 2009 and won't depreciate significantly against the greenback.

Speaking about the Hong Kong economy, Wang said that the 14-point plan from the central government can help the city mitigate the impact of the credit squeeze.

"The measures can help bolster the confidence of Hong Kong economy. With the expanding yuan business, Hong Kong will benefit from being the hub for yuan settlement."

So said that international capital will move back from derivative products to conventional investment sectors such as properties and debts.

Hong Kong, therefore, has an advantage in attracting foreign capital because banking, property and debt markets remain healthy in Hong Kong.

(HK Edition 12/23/2008 page2)