No signs of rebound for the Chinese economy, says PBOC?s adviser

China?s economy will continue to slow, and probably into next year, a PBOC advisor said.

Song Guoqing, a PBOC advisor and Monetary Policy Committee member, told Bloomberg that growth will slow further to 7.3-7.4% in the third quarter, and 7-7.5% in the first half of next year, and he saw little signs of rebound.? Earlier, a researcher from the Chinese Academy of Social Sciences also told Bloomberg that growth will slow into next year, and will probably be below 7% in the first quarter.

Over the weekend, he also said in a conference that monetary conditions may probably remain tight on cautious banks lending and weak fiscal spending.? Also, perhaps most notably, he recognises that there are a lot of criticisms on China?s economic policies, particularly the consequences of high inflation and over-investment, the possibility of increase of fiscal spending in the near-term is low (via Wind).

This is nothing new for us, as we noted that as economists and commentators within China is more ?pro-austerity?, and as we think that such views shared by some policymakers, we have been expecting a slow reaction towards the slowdown.? Although many believe that this ?policy paralysis? has something to do with the fact that China?s leadership will soon be in transition, we doubt if the new leadership will change course very drastically.

This article originally appeared here: No signs of rebound for the Chinese economy, says PBOC?s adviser
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Source: http://www.businessinsider.com/no-signs-of-rebound-for-the-chinese-economy-says-pboc8217s-adviser-2012-9

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