Goldman positive on nation's consumption
- Source: Global Times
- [03:42 November 03 2009]
- Comments
By Cong Mu
Goldman Sachs's global chief economist said Monday that the country's economic recovery is V-shaped, and will lead to the probability of China becoming the world's largest economy in 2050.
Jim O'Neill and his colleagues told reporters at a press conference in Beijing that the country enjoys an above-average growth environment.
The investment bank's most important economic indicator shows that the world economy bottomed in Spring when the Dow Jones Industrial Average hit 6547.05 March 2009. Since then, both the Chinese and the world economy have kept growing, O'Neil added.
"It doesn't require miracles," O'Neil said, pointing out that China needs to grow by 7.7 percent the next decade and by increasingly smaller amount after that to become the biggest economy in the world by in 2050.
The economists said this latest projection derives from their optimism about the country's consumers, who they see can replace their American counterparts to drive the world's economy.
The Chinese economic contribution to the world economy over the past nine years is greater than that of Europe and those of Brazil, Russia and India combined, Goldman said in a report.
Although Chinese consumption is comparatively small–about $1.5 trillion compared with between $9 and $10 trillion in the US–over the past three years, the country's retail sales adjusted for inflation in dollar terms have climbed nearly 60 percent, while the US real retail sales have declined about 40 percent, the report showed.
"The rate of change is key," O'Neil said, adding that data related to Chinese consumption, such as auto sales and imports, are highly supportive of their positive view about the economy.
