Concerns raised as China's economic growth slows to 7.5%

 

China's economic growth slowed for a second consecutive quarter, piling pressure on leaders to stimulate a slowing economy hurt by weak trade and efforts to cool a credit boom.

The world's second-largest economy grew by 7.5 per cent compared to the previous year in the three months ending in June, down from the previous quarter's 7.7 per cent, data showed today. Growth in factory output, investment and other indicators weakened.

The latest figures were in line with analyst expectations. They predict growth could fall further in the current quarter, adding to pressure on communist leaders who took power last year and are trying to shift China from reliance on exports and investment to slower, more sustainable growth based on domestic consumption.

Chinese leaders are likely to respond by launching new stimulus to make sure growth hits their target for this year of 7.5 per cent, said Credit Agricole CIB economist Dariusz Kowalczyk.

He said that might include weakening the Chinese currency to spur exports or pumping money into the economy through higher public works spending.

"We will seem some targeted measures to stimulate growth," said Mr Kowalczyk. "They have to do something. Otherwise they will miss their target. And they cannot afford that, because this is their first year in power."

A decline in Chinese economic activity could have global repercussions, denting revenues for suppliers of commodities and industrial components such as Australia, Brazil and south-east Asia. Lower Chinese demand has already depressed prices for iron ore and other raw materials.

Despite the slowdown, communist leaders have expressed determination to stick to plans aimed at nurturing slower and more sustainable growth.

"Major indicators are within our targeted range but we face a complex situation," said a spokesman for the statistics bureau, Sheng Laiyuan.

He said the government's goal is to "promote restructuring" and make more of the "driving force" of the market.

Growth in factory output slowed to 9.3 per cenet for the first half of the year, down 0.2 percentage points from the first quarter's rate, the statistics bureau reported.

Growth in investment in factories and other fixed assets in the first half declined by 0.8 percentage points to 20.1 per cent. Retail sales in the first half rose 12.7 per cent but that was down 1.7 percentage points from a year earlier.

"Further deceleration is possible if reforms and stimulus measures are delayed," said Alaistair Chan of Moody's Analytics in a report.

Chinese leaders have promised to launch reforms aimed at making the economy more productive and helping entrepreneurs but no major changes are expected until after a Communist Party meeting in the autumn.

Growth has also been dented by a crackdown on overly fast growth in bank lending. Government efforts to tighten lending controls caused a temporary shortage of credit in Chinese financial markets last month.

Further efforts to rein in lending, especially unregulated private lending, could hurt entrepreneurs who generate most of the country's new jobs and wealth.

The ruling party's 7.5 per cent growth target for the year is stronger than forecasts for the US, Europe and Japan, but China's weakest performance since 1991.

News
More than 90 years of car history are coming to an end with the abolition of the paper car-tax disc
newsThis and other facts you never knew about the paper circle - completely obsolete tomorrow
News
people'I’d rather have Fred and Rose West quote my characters on childcare'
News
Kim Jong Un gives field guidance during his inspection of the Korean People's Army (KPA) Naval Unit 167
newsSouth Korean reports suggest rumours of a coup were unfounded
Arts and Entertainment
You could be in the Glastonbury crowd next summer if you follow our tips for bagging tickets this week
music
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
News
i100
Arts and Entertainment
Kylie performs during her Kiss Me Once tour
musicReview: 26 years on from her first single, the pop princess tries just a bit too hard at London's O2
News
peopleSwimmer also charged with crossing double land lines and excessive speeding
Arts and Entertainment
A new Banksy entitled 'Art Buff' has appeared in Folkestone, Kent
art
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Senior Marketing Manager - Central London - £50,000

£40000 - £50000 per annum: Ashdown Group: Marketing Manager (Campaigns, Offlin...

Head of Marketing - Acquisition & Direct Reponse Marketing

£90000 - £135000 per annum: Ashdown Group: Head of Marketing (B2C, Acquisition...

1st Line Service Desk Analyst

£27000 - £30000 Per Annum: Clearwater People Solutions Ltd: Our client who are...

Trainee Recruitment Consultant - Birmingham - Huxley Associates

£18000 - £23000 per annum + Commission: SThree: Huxley Associates are currentl...

Day In a Page

Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

Isis an hour away from Baghdad -

and with no sign of Iraq army being able to make a successful counter-attack
Turner Prize 2014 is frustratingly timid

Turner Prize 2014 is frustratingly timid

The exhibition nods to rich and potentially brilliant ideas, but steps back
Last chance to see: Half the world’s animals have disappeared over the last 40 years

Last chance to see...

The Earth’s animal wildlife population has halved in 40 years
So here's why teenagers are always grumpy - and it's not what you think

Truth behind teens' grumpiness

Early school hours mess with their biological clocks
Why can no one stop hackers putting celebrities' private photos online?

Hacked photos: the third wave

Why can no one stop hackers putting celebrities' private photos online?
Royal Ballet star dubbed 'Charlize Theron in pointe shoes' takes on Manon

Homegrown ballerina is on the rise

Royal Ballet star Melissa Hamilton is about to tackle the role of Manon
Education, eduction, education? Our growing fascination with what really goes on in school

Education, education, education

TV documentaries filmed in classrooms are now a genre in their own right
It’s reasonable to negotiate with the likes of Isis, so why don’t we do it and save lives?

It’s perfectly reasonable to negotiate with villains like Isis

So why don’t we do it and save some lives?
This man just ran a marathon in under 2 hours 3 minutes. Is a 2-hour race in sight?

Is a sub-2-hour race now within sight?

Dennis Kimetto breaks marathon record
We shall not be moved, say Stratford's single parents fighting eviction

Inside the E15 'occupation'

We shall not be moved, say Stratford single parents
Air strikes alone will fail to stop Isis

Air strikes alone will fail to stop Isis

Talks between all touched by the crisis in Syria and Iraq can achieve as much as the Tornadoes, says Patrick Cockburn
Nadhim Zahawi: From a refugee on welfare to the heart of No 10

Nadhim Zahawi: From a refugee on welfare to the heart of No 10

The Tory MP speaks for the first time about the devastating effect of his father's bankruptcy
Witches: A history of misogyny

Witches: A history of misogyny

The sexist abuse that haunts modern life is nothing new: women have been 'trolled' in art for 500 years
Shona Rhimes interview: Meet the most powerful woman in US television

Meet the most powerful woman in US television

Writer and producer of shows like Grey's Anatomy, Shonda Rhimes now has her own evening of primetime TV – but she’s taking it in her stride
'Before They Pass Away': Endangered communities photographed 'like Kate Moss'

Endangered communities photographed 'like Kate Moss'

Jimmy Nelson travelled the world to photograph 35 threatened tribes in an unashamedly glamorous style