China's encouraging economic data shows it will serve as the backbone for global growth in 2013, ...

CHINA'S ENCOURAGING ECONOMIC DATA SHOWS IT WILL SERVE AS THE BACKBONE FOR GLOBAL GROWTH IN 2013, SAYS GARY DUGAN OF COUTTS. SHOWS: HONG KONG, CHINA (JANUARY 17, 2013) (REUTERS - ACCESS ALL) GARY DUGAN, CIO FOR ASIA & MIDDLE EAST, COUTTS 1. REPORTER OFF CAMERA SAYING: "What do you make of China's Q4 GDP data? What does it mean for China's growth prospects?" 2. GARY DUGAN SAYING: "Yeah, I think they're a very encouraging set of numbers. I often feel that people are just waiting for China to fail again. But going into these numbers, we'd had a lot of increase in industrial confidence. Not a powerful number. So that's why people have set their figures around about 7.6, 7.7. So 7.9 is a good number and it shows good momentum into 2013." 3. REPORTER OFF CAMERA SAYING: "What does the data say about China's efforts to rebalance the economy towards more domestic consumption - any evidence that is picking up?" 4. GARY DUGAN SAYING: "Yes, I think there are some good signs here of a rebalancing. Firstly, the investment spending growth rate has come in largely in line with expectations. But the retail sales numbers at over 15% growth are marginally ahead of expectations. So there does seem to be a more powerful force or momentum building in terms of domestic demand which is exactly what the Chinese authorities would like to see." 5. REPORTER OFF CAMERA SAYING: "Does the data increase or decrease the chances of further easing measures in the near-term? If more easing is likely, what form will it take? Could we even see a relaxation of property curbs?" 6. GARY DUGAN SAYING: "Although these are a good set of numbers, I don't think the Chinese authorities are going to relent in their support to the economy nor their efforts to rebalance. I don't think that necessarily means we're going to get interest rate cuts as maybe would be the simplest way of trying to keep the economy going. But I do expect the reserve requirements, so the amount of credit the banks can offer, to increase as we go forward. And secondly I think that the measures that are put on the property sector to cool it down will not be as aggressive as some people suggest. Bear in mind that house prices probably broadly across China are still down year-on-year. We are expecting probably a modest improvement in the housing market through this year and the authorities to continue to be supportive of that, although not wishing for it to get carried away. So 20 and 30% growth rates in house prices that we've seen in the past." 7. REPORTER OFF CAMERA SAYING: "What does this growth mean for Asia? Will it continue to be the hotspot of global growth? Could India steal the thunder?" 8. GARY DUGAN SAYING: "I think China is very crucial for 2013 that it continues to maintain good growth with, we hope, limited inflation pressures, and therefore doesn't get turned off at any stage through the course of this year. The reason is important. There are very few parts of the world at the moment that are giving us consistently good news. Remember in the U.S. we've still got problems pending over the next couple of months. And although growth is good there at the moment, it might just disappear. So I think China is going to provide the backbone to global growth. It is also crucial to this region because I think the better news we've seen out of a number of economies around the region recently, the added momentum we've seen has largely come from China. Now I don't expect India to be providing the same boost. But I think it's encouraging in India that we are getting consistent improvement in structural reform. And that gives us hope over the next 3-5 years. But over the next 12 months, I think the problems of some of those reforms are, they may just clip growth a little bit so we won't be getting the same powerful numbers that perhaps some people have expected."