Baltic Business Research

Summary

• Our so-called overheating indicator (or index for GDP-growth temperature) rose in October to 7.1 compared to 6.4 in February this year (10=extremely overheated). Around 25 China experts from Asia, North America and Europe participated again in this survey.
• GDP forecasts (average): 2010: 9.7 %;  2011: 8.9 %;  2011q4: 9.0 %;  2012: 8.9 %.
  The forecasts have a slight downward bias for 2011 and a larger one for 2012. This is a signal that should be followed up on a regular basis.
• The main contribution to GDP growth during the forecasting period is expected to come from (ranked):
  No 1: investment
  No 2: consumption
  No 3: net exports.
• 63% of the panelists predict that the RMB will have a slight appreciation against the U.S.dollar in 2011 (up to 5%) and 32% a more visible one (by more than 5%). The latter share has been growing sharply since our last survey.
• 95% of the panelists think that there still exists a dangerous price bubble on the real estate market (Feb 2010: 78 %). This is a noticeable change to the worse.
• The panel’s grading of confidence in the Chinese economy looks as follows
  (10=best grading; 1=very low):
  3 years from now: 3.5             5 years from now: 3.0       10 years from now: 2.9
• Some Chinese areas that have received their grading again, October 2010
  (10=best grading; 1=lowest grading):
  Trust in statistics:  4.4
  Trust in corporate accounting:   4.2
  Institutional framework: 4.4
  Transparency in economic policy:   4.0
  Transparency on financial markets:   3.6

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