THE Chinese economy has taken a hit from the
dwindling exports markets amid a debt crisis in the EU and US and global
uncertainties. A number of small and medium companies that contributed 80 per
cent of the cheap exports to the economy have shut shop.
For the second
time in September, there was a drop in the country’s GDP. As against
expectations of a 9.3 percent, the growth rate in the third quarter was only 9.1
per cent as compared with a 9.5 per cent growth rate in the second
quarter.
To combat the economic slowdown, the Chinese government is
considering ease in credit to support cash strapped small businesses by
providing them with larger loan quotas. China may also consider a cut in
interest rates or roll out a new stimulus package worth trillions of Yuan, if
the situation worsened.
Economists are hopeful that the slowdown would
not be as drastic as the economic recession of 2008 and the domestic demand
would remain resilient.
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