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China to spend, spend, spend: JP Morgan

CHINA is moving away from a reliance on exports and wants to boost consumption among its populace...

Staff Reporter
China to spend, spend, spend: JP Morgan

JP Morgan managing director and chairman global markets China Jing Ulrich outlined what steps the Chinese government would take in 2012 to ensure a “soft landing”

“We see three main objectives by the central government in China,” she said.

“Number one is to engineer a soft landing, number two is to preserve the progress China has achieved in containing inflation and containing house price escalation.

“Number three and most importantly, China is undergoing structural change of the economy away from the dependence on exports and investments more towards consumption.”

Ulrich described what policies government would follow this year.

“We will have monetary easing, we will also have the support of smaller enterprises in China,” she said.

“Large companies tend to be favoured by large banks in terms of credit extension, small companies tend to pay much higher interest and it’s very difficult for them to obtain loans.

“The central government is making a concerted effort to support smaller enterprises.”

Ulrich said the government would also boost wages to the manufacturing sector, and lower tax rates, to boost disposable income among Chinese.

“We have tax reforms being unveiled in Beijing,” she said.

“Basically, we have tax reductions across a whole host of industries to support economic growth.”

This article first appeared in ILN's sister publication MiningNews.net.

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