Delays in implementing China's social security safety net will result in precautionary increases in personal savings that will damp down intended increases in consumption

摘要

I opine that China's year-over-year growth in 2009 will be in the 5-8 percent range. The wide range reflects the multiple uncertainties that the economy confronts. These can be usefully construed as constituting a balance sheet of factors, some of which point toward the upper end of the range, while others point toward the lower end.rnFactors on the plus side of thernledger include China's RMB ¥4 trillion "stimulus" package (in relative terms, three times larger than the more-or-less corresponding U.S. package); continued substantial growth in military spending (less than the growth in 2008, but still a consequential, if unacknowledged, additional stimulus); continued, although somewhat slower, rising domestic consumption; and a large, perhaps increased, current account surplus resulting from a greater decline in imports than the decline in China's exports (the prospect that oil prices will remain in the neighborhood of $50 per barrel tending to boost the current account surplus and propel growth).