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Will Olympics become a watershed in China's economy?
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Guo Zhixiao, a Beijing-based investor in his 40s who had lost heavily in stock trading, said he expected the Chinese stock market to rebound significantly in the next three months thanks to the hosting of the Olympics.

And on the post-Olympics economy, he sounded more upbeat than economists, saying the Chinese economy was likely to grow more healthily and stably after the Games because the nation and the government would be able to put more attention on the economy and adjust it more freely.

"If the Chinese economy unfortunately slumps into recession, it should largely be the result from a global economic crisis," Guo claimed.

Minor policy adjustment expected

As China released its economic figures for the first half, top Chinese policy-makers were expected to soon convene a high-level routine meeting to analyze the country's overall economic situation, during which policies for the second half would be determined.

Many economic analysts were trying to figure out what kinds of economic policies would come out from the government meeting.

Zhuang, of the ADB, maintained that China was not expected to make big changes to those fundamental policies implemented in the first half.

"Since those fundamental policies have not realized their goals, it is necessary for the government to stick to them," Zhuang said.

"But the government was very likely to introduce some minor policy adjustment by employing monetary and fiscal tools. For instance, the country might probably adopt some favorable policies to help those exporting companies overcome the current difficulties," he said.

Other Chinese analysts shared Zhuang's views.

Gao Huiqing, Director of the Strategic Planning Division of the Development Research Department under the State Information Center, said those basic policies set out early this year, such as the tight monetary policy, would continue to stay put but some technical policy adjustment was expected.

There were a huge number of exporting companies in East and South China, such as Jinwoniu, which were facing formidable pressure of survival, and there were chances that the government would raise export tax rebates for them, according to Gao.

There were reports saying the Ministry of Commerce had made a formal proposal to the State Council, the Cabinet, that the pace of the yuan appreciation should be slowed and tax rebates raised to prevent a significant decrease in exports.

The Ministry of Commerce said in its proposal that exporting companies needed more time to adjust to the changing situation; otherwise a lot of enterprises would close, according to an earlier report by the Nanfang Daily.

In fact, many Chinese companies had anticipated some changes to current policies since early this month when four senior Chinese leaders carried out field investigation tours to four major Chinese exporting regions, namely Guangdong, Jiangsu, Shanghai and Shandong.

In this rare wave of investigation tours, Premier Wen Jiabao visited Jiangsu and Shanghai, Vice President Xi Jinping went to Guangdong, Vice Premier Li Keqiang traveled to Zhejiang while Vice Premier Wang Qishan toured to Shandong.

Lin Wenshui, the workshop owner, read something positive from the news.

"When Xi came to Guangdong, there were many news reports. And Many people here felt that things would change for the better, sooner or later," Lin said. "I will try to hold on to the end of the year, and after that, I think my business will recover."

(Xinhua News Agency July 19, 2008)

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