Vibrant dragon, golden snake?

While China''s entry into WTO is expected to attract vital capital inflow, Frank Gong, vice president of the global markets group at Bank of America, warns that it will bring short-term risk to the currency market.

Frank Gong, a currency strategist at Bank of America, expects robust growth to continue in the year of the snake. Setting the scene at the recent Eurofinance Cash and Treasury Management conference in Singapore, Gong reports that China reported the highest growth rate in Asia during the first quarter. Despite the global slowdown, it recorded first quarter growth of 8.1% year-on-year.

Factors that are expected to support this growth are a continuing flow of foreign investment and a less export-dependent economy due to rising domestic demand. Foreign direct investment FDI is growing at a rate of 10% yoy and is expected to amount to nearly $50 billion in 2001. Already in the first...

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