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China’s Economy May Decline in the Fourth Quarter

Economic Information, a publication under Xinhua, published an article about the economic trends in 2013 by Li Zuojun, who is from the Resources and Environment Policy Institute at the State Council’s Development Research Center. Li predicted that, after the weak growth in the first three quarters, China would face a probable economic decline.

According to Li, some growth was the result of the following: the residual effect of the 2012 economic rebound, an increase of investors’ confidence as a result of the installation of new leadership, the new urbanization strategy, and the improvement of the international environment where the economic recovery of the United States, the stabilization of Europe, and the improvement of Japanese economy stimulated China’s exports.

The probable decline in the fourth quarter of 2012 will be caused by two factors. One, in May of last year, China adopted policies and measures aimed toward steady growth. Policies of this nature tend to bring growth for about one year. After October 2012, China’s economy rebounded. This will last no more than one year at the maximum. Two, there may be new macro adjustment policies implemented in the second or third quarters to contain the rebound of Gross Domestic Product, the Consumer Price Index, and the housing market. The economy will slide as a result.

Source: Economic Information, April 18, 2013