Economic Slide Likely to Worsen in Q2
Disappointing recent economic data points to a Chinese economy running out of steam, according to Langi Chiang and Jonathan Standing of Reuters:
Evidence has mounted in recent weeks that China’s economic growth is fast losing momentum but Premier Li Keqiang tried to strike a reassuring note, saying the economy was generally stable and that growth was within a “relatively high and reasonable range”.
China’s economy grew at its slowest pace for 13 years in 2012 and so far this year economic data has surprised on the downside, bringing warnings from some analysts that the country could miss its growth target of 7.5 percent for this year.
“Growth remains unconvincing and the momentum seems to have lost pace in May,” Louis Kuijs, an economist at RBS, said in a note. “The short-term growth outlook remains subject to risks and we may well end up revising down our growth forecast for 2013 further.” [Source]
China’s economy is firing blanks, writes Forbes contributor Kenneth Rapoza. Bloomberg News reports that the slowdown will challenge the resolve of President Xi Jinping and Premier Li Keqiang to avoid short-term stimulus measures:
“The May data will force China’s leadership and the central bank to rethink growth and inflation — it seems they were too optimistic about growth and too concerned about inflation,” said Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd. in Hong Kong. “It’s a test for China’s leadership to see whether they are determined to reform.” [Source]