|2012 trade deficit is likely, say economists|
Stephane Deo, managing director of European Economic Research with UBS AG, said
Deo said that no agreement has been reached for a reduction of Greek debt.
But the state of current negotiations means that the chances of a bailout package are slim, resulting in high stakes not just for
A UBS report estimated that any country leaving the eurozone would incur a cost of between 9,500 and 11,500 euros per person during the first year following departure, equating to between 40 and 50 percent of GDP.
"If the panic spreads to problematic
Any default would have a limited direct effect on Chinese exports, given the marginal share
However, "if it spreads to other EU members such as Italy and Portugal, China's exports would be greatly affected", said Wang Haifeng, director of the International Cooperation Center affiliated to the National Development and Reform Commission.
Wang said that the contribution net exports make to
Economists have also predicted that
Ma Jun, chief economist at Deutsche Bank Greater China, said GDP growth will slow to 8.3 percent this year, lower than the 9.1 percent the bank has predicted for 2011.
"Because of weakening property investment and a slowdown in exports, the first quarter of 2012 will see a deceleration in growth," Ma said. "We predict quarter-on-quarter GDP growth for the fourth quarter will be 7.3 percent, and in the first quarter of 2012 it will hit 6.4 percent."
Sales of residential properties will ebb by between 10 and 15 percent this year and newly started construction units will also slow, said Wang Tao, chief economist at UBS China.
But the unprecedented push for affordable housing will result in a 40 percent rise in total construction, boosting spending on infrastructure, such as materials and machinery.
On the monetary front, Wang said the tightening of credit in
Ma noted that the consumer price index (CPI), a major gauge of inflation, is expected to drop sharply until the third quarter of 2012, and will average 2.8 percent for the whole year.
As a result, "policies such as monetary easing, increased bond issuance by various governments, and possible incentives to support demand from first-home buyers can be expected", Ma said.
The value of the yuan will appreciate by between 3 and 4 percent against the US dollar in 2012, Wang said.