Economics
Issues in Focus
China Economics: 2009 Outlook Upgrade on
Stronger-than-expected Policy Responses
We upgrade China’s 2009 GDP growth forecast to 7.0%
from 5.5%, based on much stronger-than-expected
policy responses that have boosted confidence and thus
effectively prevented a potentially more severe
slowdown in private consumption and investment in
1Q09.
Hong Kong: A Repeat of the SARS Outbreak?
We believe the negative impact from the current swine
flu outbreak on the Hong Kong economy will be smaller
compared to the SARs epidemic in 2003. However, this
outbreak will undoubtedly dampen the pace of recovery
from the ongoing global recession.
Taiwan: NT$ Appreciation
We have turned positive on NT$ and asset prices in
Taiwan due to repatriation of overseas Taiwanese
capital as well as Chinese capital inflow.
NT$ appreciation is not merely a recovery, but is a
re-rating event. Given ample liquidity, low interest rate
and rebound in confidence, asset price reflation should
be on the way.

China
2009 Outlook Upgrade on Stronger-than-expected Policy
Responses
4
“Worse” in 1Q09, But Not as Bad as Expected 10
PBOC Monetary Policy Statement 14
Hong Kong
A Repeat of the SARS Outbreak? 15
Taiwan
NT$ Appreciation 17
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