World Bank, others remain upbeat on growth

International organizations and investment banks have remained upbeat about China's economic growth prospects, with analysts saying the country is set to achieve its annual growth target.

The World Bank said in a report on June 4 that China's year-on-year GDP growth will reach 6.5 percent, unchanged from its prediction in January. China's fiscal support will offset the impact of its tightening monetary policy stance on growth, and the country will contain financial risks, according to the World Bank. It said China will encourage its economy to tilt toward consumption to expand.

China had set a GDP growth target of about 6.5 percent for the year. It achieved a higher-than-expected 6.9 percent GDP growth in the first quarter. Recent indicators, such as the purchasing managers index, a gauge of business conditions and economic health, also showed that growth remained steady in May.

Investment bank Morgan Stanley raised its forecast recently for China's growth to 6.6 percent from 6.4 percent. It said China will continue to clean up its financial sector and curb credit expansion to bring financial risks under control and resort to "counter cyclical" measures that are unlikely to derail growth, according to a South China Morning Post report.

"Growth has peaked and will moderate in coming quarters due to higher base and reduced policy support," Morgan Stanley said in a report. "Nonetheless, the slowdown will be modest."

Jing Ulrich, managing director and vice-chairman of Asia Pacific at JPMorgan Chase's estimate of China's growth JPMorgan Chase, said on June 6 that China's growth will reach 6.7 percent, Bloomberg reported.

UBS also forecast that China's GDP growth will be 6.7 percent this year.

"Although China faces some challenges, it has been resolute in ensuring that no systemic financial risks would occur," says Zhao Xijun, a finance professor at Renmin University of China.

By pressing ahead with supply-side structural reforms, the Chinese economy has become more resilient, Zhao says.

The World Bank also predicted that the global economy will expand by 2.7 percent this year.

xinzhiming@chinadaily.com.cn