Roubini Global Economics Forecasts China's 2016 Growth at 5.4%

NEW YORK, Dec 10, 2014 /PRNewswire/ -- Roubini Global Economics, a leading provider of independent, global macroeconomic research, forecasts China's 2016 GDP growth at 5.4%—well below the current Bloomberg consensus projection of 6.7%.

"Our recent trip to China underscored the myriad challenges facing the Chinese economy, which is now in the midst of a marked slowdown. Efforts to reorient the economy toward domestic consumption are not occurring quickly enough and President Xi Jinping's stance on the reform question is a matter of considerable speculation," said Chairman Nouriel Roubini. "The next few quarters will tell us whether he will commit to making serious changes or opt to maintain the status quo."

Roubini, together with Don Hanna (Managing Director, Asia) and Daili Wang (Senior Economist), recently published a two-part report on the takeaways from the China trip, charting the trajectory of the economy's deceleration and discussing the market implications of the slowdown. The authors cite lower investment, especially in residential construction, and weakening domestic demand as key headwinds in the coming years, with the resulting friction taking a toll on GDP growth, Chinese equities and commodity demand. In its latest China Outlook, the company downwardly revised its 2016 growth forecast for the economy from 5.6% to 5.4%.

"Rebalancing the Chinese economy requires more than simply cutting credit or investment as a share of GDP," said Hanna. "It calls for aligning risks and returns in the new credit-funded investment that ensues.  Those who like the current 'heads I win, tails, you lose' structure oppose these changes. Much of the uncertainty springs from differing assessments of Xi's readiness to purse meaningful economic reforms, which would mean confronting those who gain from the economy's current unsustainable structure."

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About Roubini Global Economics

Founded in 2004 by economist Nouriel Roubini, Roubini Global Economics is an independent, global macroeconomic research firm. The firm's research combines expert insights with systematic analysis to translate economic, market and policy signals into actionable intelligence for a wide range of financial, corporate and policy professionals. This holistic approach uncovers opportunities and risks before they come to the attention of markets, helping clients arrive at better decisions in a timelier manner. Roubini Global Economics is headquartered in New York, with offices in London and Singapore.

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