CHINA's growth will moderate over the medium term as the economy continues to rebalance gradually, according to a World Bank study.
Growth is expected to slow to 7.6 per cent in 2014, and 7.5 per cent in 2015, from 7.7 per cent in 2013, according to the World Bank's China Economic Update.
"The rebalancing will be uneven, reflecting tensions between structural trends and near term demand management measures," said chief China economist Chorching Goh.
The slowdown in the first quarter reflected a combination of dissipating effects of earlier measures to support growth, a weak external environment, and tighter credit, especially for real estate, said the report.
But economic activity, including industrial production, has picked up in recent weeks. The recent acceleration reflects robust consumption and a recovery of external demand.
This growth is expected to continue into the next two quarters, supported by infrastructure investments and tax incentives for small- and medium-sized enterprises, said the World Bank.
Of concern, however, is a "disorderly deleveraging of local government debt" that could trigger a sharp slowdown in investment growth.
"Second, an abrupt change in the cost of, or access to, capital for such sectors as real estate could significantly reduce economic activity. Finally, the recovery in exports may not materialise if growth in advanced countries weakens," said the report.
MARKETS
06 June 2014 - 21:00
World Bank expects China GDP growth to slow from 7.6pc to 7.5 in 2015
CHINA's growth will moderate over the medium term as the economy continues to rebalance gradually, according to a World Bank study.
MARKETS
06 June 2014 - 21:00
World Bank expects China GDP growth to slow from 7.6pc to 7.5 in 2015
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