Chinese GDP growth could plunge to below 7% if the government doesn’t act now to shift the focus of policy to a more accommodative stance from the current anti-inflationary bias, an economist and advisor to the National Development and Reform Commission said in comments published Monday.
“The government should abandon its loan quotas as soon as possible and boost money supply growth to at least 17%. Now is the key time to shift the focus of policy to pro-growth from anti-inflation,” said Wang Jian, director of the China Society of Macroeconomics, a research institution backed by the powerful economic planning body. “Tightening is crashing the economy.”
He said GDP growth will fall below the targeted 8% in the first quarter next year and decelerate to 7%, though a global recession could push growth lower.