Chinese Economic Growth Slows

Country may allow more overseas investment

The pace of China's economic expansion has slowed to its lowest rate since the first six months of 2009, according to one official's estimate, and another says the country may loosen rules that govern overseas investment for its people.

Bloomberg reported Tuesday that Zhang Xiaoqiang, vice chairman of the National Development and Reform Commission (NDRZ), said the Chinese economy may have expanded by about 8.4%. The official data will not be released for another 10 days.

During a panel discussion at the Boao Forum for Asia, Zhang cited “relevant China research institutes’ initial figures” for his estimate, and also said that consumer prices would likely rise about 3.5%. The forum is a gathering of government and business leaders and is being held on China’s tropical island of Hainan.

At the same conference, central bank head Zhou Xiaochuan said that the government could relax rules governing overseas investments. The news came less than a week after pilot financial reforms were given the green light in the eastern Chinese city of Wenzhou.

He did not specify whether the investment policy would be restricted to Wenzhou or could be expanded, saying only, "There may be further deregulation to allow Chinese enterprises and residents more convenience in [making] overseas investment."

Last week China's State Council said it would study the possibility of permitting direct overseas investments by Wenzhou residents as part of a "general financial reform zone" experiment. Wenzhou, in the province of Zhejiang, has a reputation in China for private entrepreneurship and gray-market lending. The latter attracts private businesses that lack the clout to win loans at official rates from state-owned banks, which leaves the door open for interest rate abuses. On some of those gray-market loans, those rates can hit an annualized 100%.

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