Leading economists confident of a soft landing for the mainland

IMF praises efforts towards 'manageable credit expansion'

The mainland is likely to see a soft landing as it tries to slow economic growth, a senior Standard Chartered Bank economist said yesterday.

The comments by chief East Asia economist Kwok Kwok-chuen came as a senior banker with the International Monetary Fund also backed Beijing's macroeconomic policies.

Speaking at an American Chamber of Commerce luncheon, Mr Kwok said mainland officials believed the economy was fine but investments and bank loans were growing too fast, particularly in steel, cement, aluminium and property.

There 'is not a one-size-fits-all kind of instructional order from Beijing' regarding the economy, but it was a 'very calculated approach, a very sector-specific approach', Mr Kwok said. 'In other words, if you are a globally reputable steel manufacturer and you want to go to China to invest in a huge steel production facility, Beijing will say fine. But if you are a small company in Shaanxi and want to start a small factory, China wants to stop that.

'If you think about all these measures China has done in the last few months, the government is saying from a macro angle, these sectors have too many investors and so it wants to stop banks from lending irresponsibly.'

Once Beijing stops the banks from lending irresponsibly, if investors still want to use their own money in this kind of investment, 'let them do it', he said.