10% Growth Forecast For China'S GDP Growth After The Earthquake

The earthquake in Wenchuan, which shook half of Asia, is shocking. Intense relief and post disaster reconstruction are also in progress.

What is the impact of this major natural disaster on China's economy and the A share market?

The reporter interviewed Wu Changgen, the largest independent stock broker company in Asia, the chairman of the CLSA, Le Min Xin and the chairman of the Greater China region of CLSA.

The earthquake affected area is limited, and the affected enterprises are few.

Reporter: what will be the direct impact of the Wenchuan earthquake on China's economy?

Wu Changgen: first of all, the Wenchuan earthquake was an unfortunate event. We donated 2 million yuan to the disaster area in the fund, hoping that they would resume their normal life as soon as possible.

Since the number of losses caused by the earthquake has not yet been completed, our views will be limited.

After the earthquake, our analysts and companies operating in Sichuan, especially the listed companies, have been in touch with each other to understand the latest situation, and the response is not too great for them.

At the same time, combined with the announcement of relevant listed companies, we feel that the impact on the overall economy will not be great.

Our forecast for China's GDP this year has increased by 10%.

It may cause CPI to rise, and food prices become the key.

Reporter: will the Wenchuan earthquake continue to push up the CPI index?

Yue Min Xin: earthquake is definitely a very sad thing.

Our CLSA is very sympathetic to the victims in the disaster area. The company will have some long-term projects to help rebuild the disaster area, for example, education.

The snow disaster at the beginning of the year affected the economy of China, especially the price of agricultural and sideline products.

In April, CPI reached 8.5%, of which CPI rose by about 6% due to food prices.

Earthquake disasters may lead to shortages of related materials in local areas, like snowstorms, and also cause difficulties in controlling prices.

Therefore, controlling food prices will become the key to control CPI, and the macro-control policy will play a key role.

To meet the third wave of economy and upgrade industries

Reporter: in 2008, China's economy encountered more "external factors", such as natural disasters, rising prices of raw materials, appreciation of the renminbi and so on. Can China's economy sustain rapid growth in the new historical stage?

Rofu: natural disasters and changes in prices and exchange rates will not reduce our expected growth targets for China's economy, because China is now in the third wave of economic reform.

In the past 6 months, the government has introduced many measures.

First of all, export tax rebates for highly polluting products were reduced. The export of leather exports fell by 33% in the first quarter, which is the feedback of this measure. The second measure is the introduction of the new labor law, which sets a better legal guarantee for the laboring workers.

What is the impact of the third wave?

The first is the integration of industries. I believe that in the coming year, the number of Chinese factories will decline, those factories that are closed are relatively small factories, and the second is industrial upgrading, and the profits of enterprises engaged in simple processing trade will be reduced. This will urge enterprises to carry out technological pformation and greater investment and complete industrial upgrading; third, the rapid development of the service industry, absorbing the labor force pferred from the first and second industries.

In the process of pformation, there will be a "labor pains" of shutting down enterprises and laid-off workers, but this is not the mainstream. China's economy will still maintain about 10% growth in the next few years.