Q&A: What lies ahead in 2015 for Chinese economy?

BEIJING - It is almost certain that China will post its lowest growth rate in more than a decade in 2014, but experts seem uncertain about what will happen in 2015.

Here we review the outlook and risks for Chinese economy in 2015:

 Is the economy sliding toward a hard landing?

Growth in 2014 looks likely to have sagged below 7.5 percent. This year, it could potentially dip lower, with property downturn and industrial overcapacity still being the main drags.

The government's efforts to balance reform with growth will also exert a downward pressure, but it will be a soft landing rather than a sharp contraction, as the broader economy and job market remain healthy.

There have been signs of a rebalancing, with services accounting for a greater share of output than manufacturing; and consumption accounting for a larger share of gross domestic product (GDP) than fixed asset investment.

Moreover, policies, such as the abolition of registered capital requirements for new firms and the replacement of business tax with value-added tax, will provide dividends.

Government think tank economists have lowered forecasts for GDP growth for 2015, with the rate hovering between 7 percent and 7.3 percent.

Read more: http://www.chinadaily.com.cn/

Sea Level Rise Could Reduce The World Economy By 10 Percent This Century

Flood hits a Bangkok airport in 2011. New research predicts that by 2100, damage from flooding and rising seas could cost the world almost a tenth of its economy.
The paper, by researchers at the University of Southampton, modeled the economic effects of future sea level rise, using various projections from the Intergovernmental Panel on Climate Change (IPCC) of future carbon emissions and global warming, along with various models of future economic growth, population growth, and population movement.
According to the IPCC’s projections, sea level will rise 25 to 123 centimeters, depending on whether humanity does a lot to tackle climate change or just coasts along with business-as-usual. Using those models, the researchers concluded 0.2 to 4.6 percent of the world’s population will be flooded annually by the end of the century, resulting in annual losses of 0.3 to 9.3 percent of global GDP.
For reference, 5 percent of the world’s population in 2100 could mean 600 million people many of whom will live in deeply impoverished regions like southern Asia. As for GDP, 9.3 percent of that could be over $100 trillion.
The researchers also looked into scenarios in which people around the world attempt to protect themselves and their coasts by expanding dikes, levees, and other protection systems. The paper concludes such efforts could reduce the damage from flooding by two or three orders of magnitude, at a cost of $71 billion per year under the most demanding circumstances.

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