tailieunhanh - World Bank Office, Beijing - Quarterly Update 2008

European banks also cut lending to emerging markets. Their consolidated foreign claims on emerging Europe, Latin America and Asia had already started to fall in the third quarter of 2011 (see pages 18–20 of the Highlights). New syndicated and large bilateral loans from EU banking groups to emerging market borrowers then fell in the final quarter of the year. This was in contrast to lending to western Europe and other developed countries, which was essentially unchanged (Graph 8). At the same time, banks tightened terms on new loans to corporations and households in emerging markets (Graph 6, left- hand panel). The. | World Bank Office Beijing china Quarterly Update December 2008 The World Bank quarterly update provides an update on recent economic and social developments and policies in China and present findings from ongoing World Bank work on China. The update is produced by a team from the Beijing Office with support from the China country team. Questions and feedback can be addressed to Li Li lli2@ . China Quarterly Update December 2008 Overview The impact of the international financial and economic turmoil on China s economy has been manageable so far but is expected to intensify. China s financial system is relatively insulated from the direct impact of the international financial distress. In the real economy overall export growth has until recently remained robust due to strong demand from emerging markets and gains in global market share reflecting strong competitiveness although with pronounced differences in export performance between sectors. However looking forward the impact of the crisis is spreading globally with risk aversion and deleveraging leading to a funding squeeze that affects demand in many countries including many emerging markets. Thus as in earlier global downturns China s export growth is likely to be low in 2009 even with expected continued market share gains. Domestic factors have already made China s economy slow down in 2008 coming off its high pace in 2007. Due in part to an earlier tightening in macroeconomic policies investment growth declined in 2008 led by real estate and construction which then fed through to several upstream industries. Most other segments of the domestic economy notably consumption seem to have held up reasonably well so far. Looking ahead private sector investment is likely to be weighed down by the unfavorable external prospects and continued weakness in real estate. Private consumption growth is likely to soften in 2009 but will receive some support from fiscal .