Analyst: China headed for major slowdown

BEIJING, Nov. 8 (UPI) -- China could be headed for a major economic downturn, an analyst's report indicates.

Eric Fishwick, chief economist at CLSA, an Asia specialist private equity firm, said China's growth in 2009 could dip to 5.5 percent, The Times of London reported Saturday.

The newspaper reported that already China's electricity sector is lagging, with monthly national power output in October falling for the first time in a decade. More than 70 percent of the electricity generated in China is consumed by industry.

"Investors need to analyze China as 'just another capitalist country' and question whether government policy will actually work," Fishwick said. "China is revealed as extremely cyclical with the volatile expenditure components much larger compared with the stable ones. Our 5.5 percent GDP forecast has already factored in a broad and aggressive government stimulus."

In a separate report, Goldman Sachs said Friday the Chinese economy will likely stabilize in the second half of 2009.

Deng Tishun, Goldman's China strategist, said Chinese stocks listed in Hong Kong could rise more than 50 percent next year.