A growth of +6.5% is forecast, lower than the figure promised by Premier Wen Jiabao (+8%), seen as necessary to guarantee social order and employment.

Washington (AsiaNews/Agencies) – The World Bank (WB) has once again slashed China's economic growth forecast to 6.5 per cent in 2009 +6,5%. It had set forecast growth at 7.5%.  Either ways it is far lower than the expectations of Beijing’s leadership to stem social tensions and rising unemployment.

The World Bank said in releasing a quarterly report on mainland's economy; “As the global crisis has intensified, China's exports have been hit badly, affecting market-based investment and sentiment, notably in the manufacturing sector”. Even if  +6.5% is a considerable growth rate for any nation, it is “far weaker” than China’s true potential.  According to the WB, the slowdown would probably lead to weaker investment, lower job growth, less migration and downward pressure on prices, while a fall in global trade volumes would result in China's export-driven economy increasingly relying on its domestic market.

For months now, China has been experiencing the effects of the global downturn.  Because of plummeting foreign demand, exports have dwindled and tens of thousands of small and medium businesses have closed.  Government leaders forecast that by the end of 2009 there will be over 50 million people without work.  In February exports fell by 25% and direct foreign investment by 15.8%.

At last week’s National People’s Assembly Premier Wen Jiabao instead promised a growth of 8% this year, while admitting that it would be a “difficult” goal to reach.  The target of 8% is seen by academics as necessary to guarantee social wealth and employment.  In an attempt to restart the economy, the central government unveiled a 4 trillion Yuan (400 billion euro) stimulus package in November.

The governments main fear is that will the collapse of the economy social disorder will mushroom.  Last year alone, cases of “mass incidents” (strikes, sit-ins, clashes with police, injured and killed), because of working conditions peaked at 87 thousand.  But according to the WB, a profound social instability is improbable, given the Chinese government’s measures to counter social issues with a network of welfare.

 “China’s economic foundations – confirms the report – are relatively solid and will allow the authorities to put stimulus policies into action that will bear fruit well beyond 2009”.

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