View more on these topics

Chinese economy set to bottom by the middle of the year

In an environment of widespread gloom, the World Bank says there are signs of recovery in China, with the economy set to bottom out by mid-2009.

In a half-yearly review of East Asia issued today, the World Bank says the huge fiscal stimulus package beginning this year will drive the stabilisation and eventual recovery of China.

However, with the country still heavily reliant on exports, the sustainability of its rebound is tied to the fortunes of developing economies.

Vikram Nehru, the chief economist for the region, says: “There is no doubt that the East Asia and Pacific region is confronting very difficult times. The countries that are able to tackle short-term challenges while staying focused on longer-term priorities will likely emerge better placed after the crisis to resume growth.”

Meanwhile the Philippines has become the latest victim of the economic crisis as the global slowdown spreads throughout East Asia, the World Bank has warned.

Elsewhere in the review, Eric Le Borgne, a senior economist, says falling global demand has had a knock-on effect on the country’s private sector, despite its strong financial fundamentals going into the crisis.

“While the country was relatively sheltered from the initial global financial turbulence, it was nonetheless affected. Now, with aggregate demand falling precipitously, sharp declines in exports and industrial production are triggering factory closures, impacting labour markets and poverty,” Le Borgne says.

The authorities were quick to respond with fiscal stimulus measures and social programs to support those affected. However because of the projected output gap, this will mitigate rather than overcome the contraction in the private sector, he adds.

The Philippines was well placed to withstand the global economic turmoil because of the lessons learned from the 1997 Asian crisis. Since then it has bolstered its foreign exchange reserves and reduced its debt, but it was not enough to stave off the impact of a slowing production sector. Projected real GDP growth for 2009 has been revised to 1.9% and hopes for a strong rebound in 2010 have diminished, Le Borgne says.


Repeated failures to rein in banks

Margaret Cole, director of enforcement at the FSA, is quoted as having said: “Taking action against Winterflood shows the FSA is determined to tackle abusive behaviour and to deter market participants from threatening the integrity of markets.”


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm