China Will Survive Turmoil in Eurozone, Global Fiscal Crisis: Analysts
China, the world's second-largest economy, will weather out the fiscal turmoil hitting the eurozone and will eventually survive the global financial meltdown.
As Europe enters into recession, the Asian country, though feeling the effects, will not be one of those going down the whirlpool.
Even as it reported a weakened manufacturing activity in October, alongside contracting export orders, analysts believe China will continue its reign as one of the world's emerging economies, albeit a temporary slowed down run.
Moreover, China's economic growth is no longer dependent on just trade.
"China is modernizing. Forty per cent of China's GDP growth is from consumption and that will increase; 40 per cent is from investment in plant and equipment. It is becoming a self-sustaining process and China can sell right through this," Carl Weinberg, chief economist at High Frequency Economics, told Reuters News.
Unlike most advanced economies, China still has enough legroom to either step up its government spending or ease credit conditions whenever fiscal outlook worsens. And with inflation pressures sliding, China's People's Bank now has more room to plan better schemes.
Analysts are expecting two types of data this week concerning China.
Wednesday data, on one hand, is expected to indicate the consumer price index growing 5.5 per cent in October from a year earlier, slowing from September's 6.1 per cent annual increase. Data on Thursday, on the other hand, is expected to show October exports hiking 16.5 per cent from a year earlier, though still slower than September's 17.1 per cent.
Meanwhile, Chinese President Hu Jintao remain confident the eurozone has the ability to solve the sovereign debt crisis.
"We believe Europe has the wisdom and ability to solve the debt problem," China's Foreign Ministry said, quoting Mr Hu.
"China always supports the efforts made by Europe to deal with the global financial crisis and realize an economic recovery."
Hu was one of the global leaders who attended the G-20 summit that ended in Cannes, France on Friday.