China’s economy slowing ‘significantly’

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China’s economic growth may slow to 9.2 percent in the third quarter from 9.5 percent in the previous quarter, China Securities Journal reported today, citing the State Information Center.

China’s inflation may rise to about 6.2 percent in the third quarter from 5.7 percent in the second quarter, according to the report. Third-quarter trade surplus may gain about 6.7 percent from a year earlier to $69.6 billion, according to the newspaper.

The Conference Board, a New York-based research organization, also said that growth in?China, the world?s second- biggest economy, is slowing ?significantly.?

?The economy is significantly moderating right now and also over the next couple of months,? Bart van Ark, the organization?s chief economist, told Bloomberg Television from?New York?ahead of the release of the organization?s leading indicator for China. ?We still expect it to be pretty much a soft landing.?

The data is due at 10 a.m. Beijing time today.?China?s economy?is cooling after the government raised?interest rates?and banks? reserve requirements and extended curbs on the real- estate market, adding to concerns about the outlook for the global economy.?Christine Lagarde, the International Monetary Fund?s managing director, today urged developed countries to support economic growth even as they make fiscal cuts.

China?s economy is full of imbalances that need to be addressed, van Ark said. The nation needs to shift to more of a consumer economy and to build more ?social infrastructure rather than the hard infrastructure, he said.

Demand slows ‘sharply’?

?Growth in China is actually slowing more seriously than the headline numbers suggest,? Kevin Lai, an economist at Daiwa Capital Markets in Hong Kong, said in a Bloomberg Television interview today. He said that trade volumes showed demand slowing ?sharply? in China and the world.

A slowdown in Hong Kong has highlighted the threat of another global slump as weakness in the?U.S. economy?and a debt crisis in Europe cap demand for exports. The city last week reported that gross domestic product contracted in the second quarter from the previous three months.

?For the advanced economies, there is an unmistakable need to restore fiscal sustainability through credible consolidation plans,? Lagarde wrote in the Financial Times. ?At the same time we know that slamming on the brakes too quickly will hurt the recovery and worsen job prospects.?

The State Information Center is a research agency under the National Development and Reform Commission, the country’s top economic planner.

Closer examination

Statistics indicate the pace of China?s economic growth slowed in the second quarter of this year as weaker global demand and government policies aimed at reining in excess liquidity and runaway property prices have had moderating affect on the world?s second-largest economy.

Of course, official data released last month showed China?s economy continued to grow at a blistering 9.5% for April through June when compared with the same period a year ago. That rate is down only a little from the 9.7% in the first three months of the year, high-growth by any measure, suggesting the country could face more government measures to cool the economy. But any slowing, even slightly can have a negative impact and results elsewhere in the global economy.

A slowdown in the Chinese economy, like the U.S. requires closer examination and the effects of the slowdown on economic markets, global consumer demand, and commodity price inflation as well as demand for specific goods and services.

Sources: sfgate, Bloomberg, teamaltman

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