2013 economy 'brighter': JPM

The enhanced certainty of the global economy for 2013 will bring a more easing monetary environment and a brighter future for China's economy in the year ahead, said Frank FX Gong, managing director of J.P. Morgan Asia-Pacific.

"There is not too much suspense in next year's world economy," said the veteran banker, who is also vice-chairman of China Investment Banking, J.P. Morgan (Asia-Pacific) Ltd.

He said the political imperative means that US president Barack Obama won't let the "fiscal cliff" to "hard land".

"Fiscal cliff" is the popular shorthand term used to describe the conundrum the US government will face at the end of 2012 when the terms of the Budget Control Act of 2011 are scheduled to go into effect. Higher taxes and spending cuts are expected to reduce gross domestic product by 4 percentage points in 2013.

The possibility of the exit of Greece from the eurozone and the financial union's collapse was also significantly reduced when the European Central Bank released a series of commitments, Gong said.

"This does not mean the EU will get better. But it would not deteriorate dramatically either. The capital market see this and it is the reason behind its pickup recently," said Gong.

However, the US Federal Reserve will continue, or even expand its current quantitative easing policy, which will give rise to the Chinese government's need to supply more money, Gong said.

"When others print more money and you don't, you risk inflating your money," he said.

A more easing monetary environment will satisfy more enterprisess finance needs and bolster stronger economic growth, which Gong forecast to be around 8 percent, slightly higher than this year's.

Another prominent analyst also gave a positive outlook for China's economy in 2013.

"The external environment won't be more complicated than this year. We don't have to overreact to the present economic slowdown. We expect to see next year's economy to be between 7.5 percent to 8 percent (in growth)," Zuo Xiaolei, managing director of China Galaxy Securities.

zhengyangpeng@chinadaily.com.cn