Vivian Wai-yin Kwok writes in Fobes:
After China presented a glittering 7.9% economic growth rate in the second quarter, some began to question whether the Chinese picture was really that rosy or whether it had been air-brushed by excess fixed-asset investment.
Since China has to invest its record foreign reserve holdings of $2.1 trillion anyway, building more roads and bridges at home will likely generate better returns in the long run than buying U.S. government debt, Morgan Stanley says.
China is staging a robust recovery, show a string of new economic data. Wang Xiaoguang, director of the Macroeconomics Division of the Institute of Economic Research of the National Development and Reform Commission, told Xinhua this week that China is likely to grow by 9% in the third quarter. That strong growth, coming while other big economies remain in the doldrums, comes on top of the already stronger-than-expected growth in second quarter.
Meanwhile, Chinese entrepreneurs turned more optimistic when surveyed about the domestic macro economy. The People's Bank of China announced Tuesday that its entrepreneurs' confidence index reached 68.4% in the second quarter, 7.2 percentage points higher than the first three months.
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