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Economist: Mild US Slowdown Not All Bad for China
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A mild slowdown in the US economy would help China cool off its red-hot growth and avoid a much-feared hard landing, said a senior economist at US-based Global Insight, an economic and financial analysis provider.


"A mild economic slowdown in America could help China, which is currently trying to cool down its economy," said Nariman Behravesh, Global Insight's chief economist.


Behravesh dismissed fears that a slowing US economy, which is China's main export destination, would have a wholly negative impact on China. In fact, it might help slow China's economy and force it to turn to domestic consumption.


The US economy had a blistering start to the year with 5.5 percent growth in the first quarter.


The economy, however, has been losing momentum. It slowed to 2.6 percent growth in the second quarter and a meagre 1.6 percent in the third.


Behravesh predicts the US economy will grow 3.3 percent this year and slow to 2.4 percent next year.


"China could weather the storm (of a slowing US economy) as it now has many sources of growth," he said, pointing to its construction boom, and diversified export destinations.


"Actually, the mild slowdown could help China cool off its economy and avoid a hard landing," Behravesh said.


China's economy surged 11.3 percent in the second quarter, its fastest pace in a decade.


It grew 10.7 percent in the first three quarters of this year.


The Chinese Government has tried a number of control measures to rein in the economy.


Behravesh, named as a top economic forecaster by USA Today in 2004, expects China to register 9.2 percent annual growth in its gross domestic product next year and 8.5 percent in 2008.


The Global Insight economist said China should boost domestic consumption to spur economic growth and press ahead with financial reform.


The Boston-headquartered Global Insight last year bought a 25 percent stake in the China Economic Information Network, the country's primary economic data provider, as the US firm is moving aggressively to beef up its presence in China.


The information company now has one office in Beijing and one in Shanghai.


It achieved more than US$100 million in revenue last year.


(China Daily November 28, 2006)


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