China Economic Panel (CEP) by ZEW and Fudan University - Slightly Positive Economic Expectations for China

Today, the Centre for European Economic Research (ZEW) in Mannheim and the Fudan University in Shanghai publish the results of the first "China Economic Panel" (CEP). CEP is a panel of experts focused on China. It serves to investigate the country’s development in the world economy on the basis of a periodical survey of economic data.

In June 2013 the CEP-Indicator of Economic Sentiment for China on a one-year time horizon starts at 4.0 points, signalling a slightly positive economic outlook for the Chinese economy. 41.9 per cent of the surveyed experts expect the economic development in China to improve over the next twelve months, while 33.8 per cent expect the economic perspectives to worsen (slightly).

Nearly every second analyst assesses the current economic situation in China as "normal". The share of optimists (29.5 per cent) noticeably exceeds the share of pessimists, represented by a group of 21.3 per cent of analysts. This results in a balance of 4.1 points, which is significantly better than the balance for the Eurozone (minus 47.5) and nearly on the same level as the current situation in the US (4.0).

The expectations for the GDP growth rate in China cool down to 7.56 per cent in 2013 and 7.64 per cent in 2014. "The experts estimate that there will not be a sharp decrease in economic growth in China, since the turnovers of consumer products have improved due to a better situation on the financial markets and a general raise in wealth," says Dr. Gunnar Lang, deputy head of ZEW's Research Department "International Finance and Financial Management".

The analysts assume a 3-month SHIBOR of 3.97 per cent in one year and of 4.22 per cent in three years. For the next three months, the analysts do not fear a shock with respect to stock market indices and crude oil.

During the next twelve months 79.2 per cent of the experts expect foreign direct investments of Chinese investors to grow further. For the same time horizon, the results show a strong increase of companies’ turnovers for all economic sectors, except the steel/metal sector (due to large overstocks) and the machinery/engineering sector, which is still suffering from weak demand caused by the world economic crisis. In particular for the steel/metal sector, the majority of analysts (54.5 per cent) expect a decrease of the economic development.

The city of Hong Kong will have the strongest economic growth measured against the overall economic situation during the next twelve months (with a balance of 61.6).

For further information please contact

Dr. Gunnar Lang, Phone +49 621/1235-372, E-mail lang@zew.de