Citing China's increasing influence over global GDP growth, Citigroup predicted that 30% of global GDP growth will be generated by China next year. (File Photo/CFP)
China's economy has been playing a greater role in global economy as the outlook for the US and European markets continues to deteriorate. Leading international bank Citigroup predicted on Thursday that 30% of global GDP would be generated by China in 2012, despite its prediction that China's GDP growth will slip to 8.7% next year.
In its report on emerging markets released on Thursday, the bank indicated that China has increased reliance on investment spending to drive its economic growth instead of depending entirely on exports.
It mentioned that after the Lehman Brothers crisis of 2008, Beijing implemented a 4 trillion yuan (US$627 billion) plan to stimulate its economy, causing an upward shift in its share of global consumption. China has enhanced its ability to tackle a global financial crisis, the bank added.
In spite of China's increasing influence over global GDP growth, the bank actually slashed its growth forecast for China from 9% for this year to 8.7% in 2012 in order to reflect the gloomy economic outlook for the US and European countries.
Although the bank expects China's economic growth to cool down in 2012, it emphasized that the chance of a hard landing in China is slim unless advanced economies fall back into recession. It said that back in March it expected China to make a 24% contribution to the global GDP in 2011 and 2012, but its forecasts now showed this contribution rising to 28% this year and 30% next year.
On the other side of the Taiwan Strait, the bank expected Taiwan's economic growth for the third quarter of this year would decline by 0.6% but would still grow next year.