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French bank Credit Agricole says no reason to panic over Chinese economy

Xinhua, October 2, 2015 Adjust font size:

French bank Credit Agricole said there was "no reason for panic" over the Chinese economy in an economic analysis published recently.

"While we acknowledge the difficulties of rebalancing the Chinese economy, our best case scenario sees a soft landing," Credit Agricole said.

The bank said it was confident on China, firstly because the Chinese government still has ample leeway to support the economic momentum if required. For example, Chinese banks' reserve ratio remains very high (at 18 percent) and if necessary could be lowered further to boost the financial sector.

Secondly, the services sector is doing much better than the manufacturing sector in China, as illustrated by Purchasing Managers' Indices (PMI) surveys.

Credit Agricole pointed out this did matter, considering the services sector currently accounts for almost 50 percent of China's GDP.

According to Credit Agricole, the Chinese economy is expected to stabilize since the fourth quarter of this year. Endite