Soft Landing or Cracked Skull, Researcher Weighs in on China

June 28, 2012 10:36 AM EDT Send to a Friend
China's economy will reach its growth target of 7.5 percent this year, according to Jai Kang, director at the Finance Ministry’s Research Institute of Fiscal Science. His confidence is based on the premise that China has ample firepower behind fiscal and monetary policy tools, which can be deployed as needed to spur growth. He also said he thinks China’s economy will "surely" stabilize.

Fears have been growing in recent weeks that China's so-called "soft landing" looks more like belly-flop onto a dry pool. The latest PMI data from the region has shown slowing growth, and there are deepening fears that the housing market is crumbling.

A popular China ETF, iShares FTSE/Xinhua China 25 Index ETF (NYSE: FXI) is lower by 1 percent today, adding to a yearly decline of close to 10 percent. Shares in China’s restricted Shanghai exchange have seen wild swings this year, dropping 6 percent in the past 30 days.




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