MNI POLICY: Hard to Be Optimistic on China Q1 Growth:Economist

     BEIJING (MNI) - China's economy will face difficulties achieving "a more

optimistic growth" in the first quarter, Zhang Yansheng, the chief researcher at

China Center for International Economic Exchanges, a think tank under the

National Development and Reform Commission, said at a briefing on Friday. 

     If starting from March, the emphasis is shifted away from fear and back to

more "rational and science-based prevention path," resumption of work and

production is more orderly, commercial, capital and labour flows return to

normal, then Q1's growth may be better than 1.5%, Zhang said. "But such a

scenario will be very difficult to achieve," added Zhang, an award-winning

economist. 

     Zhang cited the case of Beijing when a small number of infections caused

nearly the entire city's population to be confined home, and people are urged to

stay clear from crowded places. 

     "How March plays out is critical," Zhang said. Many people are still in

isolated state and the resumption of work has been relatively slow, he said. 

     Zhang cited stats to show that the viral epidemic is largely under control,

highlighting the daily numbers of newly infected cases in most provinces have

gone to one or zero outside the epicentre Hubei province.

     For the first quarter, some recognized organizations have projected zero or

negative growth, while the most optimistic is 4%, said Zhang. 

     As to full-year growth, most organizations, including the IMF, China

Merchant Securities and Caixin projected 5.5-5.6% or higher, Zhang said. "My

view is other than the worst case scenario, China's economy will be kept in a

reasonable range; the core question is how hard can we try in Q2, Q3 and Q4, how

we can balance controlling the epidemic with returning to work," he said. 

     At the same briefing, Wei Jianguo, a former vice minister of Commerce, said

China will strive to fulfil its obligations made in the Phase 1 deal with the

U.S., but may claim "force majeur" if there are some commitments unable to

fulfil due to the outbreak. 

     Wei also said inflation is within control given better logistics and

increased imports.

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

[TOPICS: M$A$$$,M$Q$$$,MI$$$$]