China economic slowdown seen deepening as Beijing pushes reform

Sun Jul 14, 2013 5:30pm EDT
 
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By Langi Chiang and Jonathan Standing

BEIJING (Reuters) - China's GDP growth is expected to have slowed down in the second quarter as weak overseas demand weighs on output and investment, providing a test for Beijing's resolve to revamp the world's second-biggest economy in the face of deteriorating data.

Second-quarter GDP figures are due to be published on Monday along with other indicators, including industrial output and retail sales for June.

A Reuters poll of forecasts by economists projected China's economy grew 7.5 percent in the April-June quarter from a year earlier, slowing from 7.7 percent in January-March.

However, trade figures last week showing an unexpected fall in exports for the first time in 17 months raised market concerns GDP could be weaker than expected.

New Premier Li Keqiang has been prominent in pushing for economic reform over fast-line growth, suggesting the government is in no rush to offer fresh stimulus to revive an economy in a protracted slowdown. Before Monday's figures, growth had already slowed in eight of the last nine quarters.

"I'm sticking to our forecast of 7.5 percent Q2 growth, but there is rising downside risk," said Zhiwei Zhang, chief China economist with Nomura in Hong Kong.

The government's official growth target for 2013 is 7.5 percent, impressive by world standards but it would be the slowest pace in 23 years for China.

Analysts have cut their forecasts for 2013 full-year growth in recent weeks following a run of weak data and government comments on slowing growth. But they mostly remain between 7 and 7.5 percent.   Continued...

 
A migrant worker holding a ticket in his mouth carries his luggage at Beijing railway station June 7, 2013. REUTERS/Kim Kyung-Hoon