China econ­omy ‘is not fall­ing off a cliff’: DBS

The China Post - - LIFE -

Main­land China’s econ­omy may be slow­ing but it is “not fall­ing off a cliff,” the chief ex­ec­u­tive of South­east Asia’s big­gest bank said Fri­day.

DBS Bank chief ex­ec­u­tive Piyush Gupta also said he does not see a re­peat of the 1997-1998 Asian fi­nan­cial cri­sis aris­ing from the tur­moil in Chi­nese mar­kets be­cause the re­gion is on a far stronger foot­ing than it was 18 years ago.

A slow­down in the Chi­nese econ­omy, a sharp fall in share prices and the de­val­u­a­tion of the yuan against the U.S. dol­lar have ham­mered fi­nan­cial mar­kets world­wide, un­der­scor­ing China’s ris­ing role as a global eco­nomic growth en­gine.

“We’re not see­ing the coun­try, the econ­omy or de­mand fall­ing off a cliff,” Gupta said dur­ing a lun­cheon with the For­eign Cor­re­spon­dents As­so­ci­a­tion in Sin­ga­pore, re­fer­ring to China.

DBS is Sin­ga­pore’s lead­ing bank and the largest in South­east Asia in terms of as­sets.

“There are sec­toral is­sues, some sec­tors will suf­fer and the coun­try is slow­ing but it is not fall­ing off a cliff.”

Gupta said in­vestors should take a broader look at China’s econ­omy, not­ing that the drag came mainly from the in­dus­trial sec­tor, in par­tic­u­lar con­struc­tion.

China’s ser­vices sec­tor, which has taken on a big­ger role in the econ­omy, is ex­pand­ing, re­sult­ing in buoy­ant re­tail sales, he said.

“If you look at the head­line re­tail sales num­bers for China, it’s still track­ing 10-12 per­cent (growth),” he said.

“It used to be 12-14, it’s come off a tad but 10-12 per­cent re­tail sales growth is not dra­mat­i­cally slow.”

Gupta also noted that while there has been a fo­cus on the de­cline in the pur­chas­ing man­agers’ in­dex (PMI) in the coun­try’s man­u­fac­tur­ing sec­tor, less at­ten­tion has been given to the PMI for ser­vices.

China’s man­u­fac­tur­ing PMI slumped to a 77-month low to 47.1 in Au­gust, ac­cord­ing an in­de­pen­dent sur­vey.

The fig­ure, which dipped from July’s fi­nal read­ing of 47.8, was the worst since a read­ing of 44.8 in March 2009.

A fig­ure above 50 sig­nals growth, while any­thing be­low in­di­cates con­trac­tion.

Newspapers in English

Newspapers from Taiwan

© PressReader. All rights reserved.