In our view, their likeliest means of juicing growth is through higher loan quotas -- a key means of controlling monetary supply. Annual loan quotas aren't officially announced, but the rumored quota for 2012 is 8 trillion yuan, up from 2011's 7.5 trillion yuan. Chinese officials have also shown signs of loosening in recent months -- lowering banks' reserve requirements, relaxing risk weightings on small business loans and reportedly increasing quotas for foreign investment. All suggest officials have their sights set on higher growth in 2012, despite the subdued official target.
An accelerating China isn't just good for that nation -- China's a major cog in the global economy. If Chinese growth speeds and the U.S. economy stays strong as we expect, not only does global growth likely continue, but it should provide a nice tailwind for stocks in 2012.
(This article constitutes the views, opinions, analyses and commentary of Fisher Investments as of March 2012 and should not be regarded as personal investment advice. No assurances are made Fisher Investments will continue to hold these views, which may change at any time without notice. In addition, no assurances are made regarding the accuracy of any forecast made herein. Past performance is no guarantee of future results. A risk of loss is involved with investments in stock markets.)