China's economic growth to slow to 9.1%
(Agencies)
Updated: 2005-05-31 15:39

Weakening investment and industrial output will slow China's economic growth for the second quarter to 9.1 percent from a year earlier, according to a report by a top government think-tank published on Tuesday by an official newspaper.

Shanghai's stock exchange is picture in this undated file photo. China's booming economy is expected to grow by 9.1 percent year-on-year in the second quarter, a report has cited figures from government think-tank the State Information Center as showing. [AFP]

First-quarter gross domestic product was 9.4 percent higher than a year earlier. In 2004 GDP expanded 9.5 percent.

The China Securities Journal quoted the State Information Center as forecasting growth in fixed-asset investment of 20 percent for the April-June quarter from a year earlier.

The report did not specify whether the think-tank was referring to overall fixed-asset investment, which grew 22.8 percent in the first quarter from a year earlier, or to urban investment, which was up 25.3 percent.

"The momentum for industrial production to continue to expand is weakening, and will for certain fall from high levels," the newspaper quoted the think-tank as saying in its latest report.

It gave no forecast for industrial production, which rose 16 percent in the 12 months to April and expanded 16.2 percent from year-earlier levels in the first four months of 2005.

A slowdown in fixed investment, which covers everything from motorways to power plants, would be welcome to Chinese policy-makers, who are targeting full-year growth of 16 percent in overall fixed-asset investment.

Growth in urban investment has slowed from rates of more than 50 percent in early 2004 thanks to government curbs on excessive lending and spending in areas such as steel and real estate.

The State Information Center's forecast of a modest slowdown chimes with a Reuters poll of economists earlier this month that forecast GDP growth this year of 8.8 percent -- still comfortably above the 8.4 percent average of the past five years.

A survey published this week of Japanese companies operating in China also struck a broadly optimistic note.

The firms, surveyed monthly by the government-linked Japan External Trade Organization, found that current business sentiment in China had leveled off in May but that expectations for the next two to three months had picked up.

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