Business / Economy

Lower exports, realty woes may hit GDP target

(Agencies) Updated: 2014-10-28 07:26

China's economic growth will slow to 7.2 percent in the current quarter, down from the previous three months, as domestic demand weakens, according to Song Guoqing, an academic with the People's Bank of China monetary policy advisory committee.

The nation's economy will probably expand 7.3 percent next year, Song told a forum in Beijing over the weekend.

Song's view was in contrast, however, with a prediction by Fan Jianping, chief economist at the State Information Center under the National Development and Reform Commission, who told an industry conference that growth is expected to be 7 percent in 2015, unless the central government releases stronger-than-expected stimulus measures.

Fan said that a decrease in exports and property development - two "engines" that fueled China's rise to become the world's second-largest economy - will be the main cause of a slowing of growth.

Fan's forecast is in line with a median estimate of 51 analysts in a Bloomberg News survey as Chinese leaders have signaled they will tolerate weaker expansion, leaving the economy heading for the slowest full-year growth since 1990.

The government will set a gross domestic product growth target of about 7 percent for 2015, according to 13 of 22 analysts polled by Bloomberg.

"I don't rule out that we will see year-on-year expansion lower than 7 percent in some single quarters next year," Fan said, adding his forecast was based on his agency's research which uses China's industrial production as a key indicator to the economic growth.

The economist's remarks may cool an improved sentiment in the Chinese economy as GDP expanded by a better-than-forecast 7.3 percent from a year earlier in the third quarter. While the government has relaxed home-purchase controls and pumped liquidity to lenders, the economy also got support from a pickup in exports in September.

Stronger exports in the current quarter will not compensate for the decline in domestic demand, the PBOC's Song said.

"In at least six months, economic growth is unlikely to pick up remarkably," Fan said in Shanghai. GDP expansion in the three months from October is seen at 7.2 percent to 7.3 percent, which will lead full-year growth to about 7.3 percent as the fourth-quarter reading has a bigger weighting, he said.

China set its 2014 GDP growth target at 7.5 percent.

The government is holding off broad stimulus, with Premier Li Keqiang expressing a preference for policy improvements and People's Bank of China Governor Zhou Xiaochuan vowing to stick with a prudent monetary stance.

China's premier typically announces the annual growth goal at the National People's Congress in March, after policymakers meet late in the year at the Central Economic Work Conference to hash out policies.

China's economic growth remained unchanged at 7.7 percent in 2013 and may ease to 7.3 percent this year, according to the median estimate of 51 analysts in a Bloomberg News survey.

Lower exports, realty woes may hit GDP target

Lower exports, realty woes may hit GDP target 

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