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China's GDP growth slows in 2nd quarter

Updated: 2013-07-15 16:14

Slower growth in the second quarter was generally within expectations and the annual growth target is still within sight, economists said.

Gross domestic product growth slowed to 7.5 percent in the second quarter of 2013, down from 7.7 percent in the first quarter, data from the National Bureau of Statistics showed on Monday.

China's GDP growth slows in 2nd quarter

Growth in the first half of the year stood at 7.6 percent, compared with the government's full-year target of 7.5 percent.

Guan Qingyou, assistant dean of the Minsheng Securities Research Institute, said sluggish export demand and falling investment are the major reasons for the slower growth.

"The policy will incline more to support growth," he said.

He said growth in the second half is expected to be stable but there is still chance to realize the 7.5 percent growth target set for this year.

Li Daxiao, head of the research department at Yingda Securities, also said the 7.5 percent growth recorded in the second quarter was within expectations and would therefore have only have a "neutral" effect on the market.

Lu Zhengwei, chief economist with Industrial Bank, said the slower growth in the second quarter was mainly caused by the industrial sector, which faces overcapacity and weakening foreign demand.

"Investment in manufacturing sectors, which contribute to about 40 percent of total investment, has already tumbled to the lowest in a decade," he said, adding that the appreciation of yuan added more pressure.

Qu Hongbin, chief China economist at HSBC, said the monthly increase of consumption and investment in the second quarter is building solid ground for the economy in the second half.

"There might be quarterly GDP growth in the second half lower than 7.5 percent, but economic reform pushed forward by policy makers will be beneficial to a stable growth," he said.

Qu said he maintained a 7.4 percent forecast for the year, and the final result maybe even higher.

John Ross, a visiting professor with Shanghai Jiao Tong University, said "the key to the situation is to have a moderate increase, a moderate stimulus, to urbanization investment in the second half of the year".