China’s economy may grow 6 percent next year if the government successfully reforms the structure of the economy and state-owned enterprises, State Street Global Advisors said.
The investment advisory firm estimates growth of 6.5 percent this year, the Hong Kong Economic Journal reported Thursday, citing Kevin Anderson, head of investment for Asia ex-Japan.
State Street Global foresees downside risks for the economy, which is unlikely to experience any upside from the current estimates, said Thomas Poullaouec, the firm’s head of strategy and research in the Asia-Pacific.
It projected that the economy would have a less than 20 percent chance of a hard landing, a scenario that may result in growth plummeting to 3 percent.
Such a scenario would drag global economic growth down to 2.3 percent, as compared with a base-case estimate of 3.3 percent.
Japan, among other Asian countries, will be hurt the most in the event of a hard landing in the Chinese economy, the firm said.
Meanwhile, Anderson does not expect the renminbi to start freely floating or to become fully convertible next year, given the potential impact on highly leveraged enterprises in mainland China.
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