The Chinese economy seems to have hit bottom in the second quarter of 2012 and will grow at 8 percent across the year, according to a report released by the Bank of China Ltd (BOC) on Monday.
Although the economy is still cooling, third-quarter growth is expected to be 7.7 percent, slightly higher than the 7.6 percent growth in the second quarter, the report said.
"We see signs that indicate the ongoing destocking among manufacturers is coming to an end. Destocking in China usually lasts six to nine months, but this time around it has already lasted for 10 months," said Cao Yuanzheng, chief economist at BOC.
Policies designed to stimulate the economy are likely to see GDP growth rise to 8.2 percent in the fourth quarter, resulting in the forecast 8 percent growth across the whole year, a figure higher than the official government target, the report said.
"The tottering global economy has affected China throughout 2012 and there is little chance of a strong rebound in the long term," said Li Jianjun, an analyst at BOC's Institute of International Finance.
Chinas' foreign trade is likely to register a single-digit growth rate this year as external demand has been cooled by the global economic slowdown. The report forecasts export growth throughout the year will stand at 6.3 percent, below the official target of 10 percent, while import growth will slow to 6.2 percent.
The world's second-largest economy has shown signs of losing steam with second quarter GDP growth of 7.6 percent, the lowest in three years.
Growth in industrial production weakened from July's 9.2 percent to 8.9 percent in August, also a three-year low, stirring calls for the government to announce more stimulus measures.
International ratings agency Standard & Poor's on Monday lowered its forecast for China's GDP growth rate to 7.5 percent from its previous 8 percent.
Andrew Palmer, an analyst at S&P, said the cut was generated by acknowledgement that the central government will not roll out a stimulus package on the scale that it did between 2008 and 2009 to guarantee a growth rate of 8 percent, as it is aware of the negative effects that last round of stimulus had, including pushing up inflation and property prices.
China's manufacturers and retailers are less optimistic about sales than they were three months ago and more companies are cutting jobs, Bloomberg reported on Monday, citing a survey named China Beige Book. New York-based CBB International interviewed more than 2,000 company executives and bankers for the survey.
Most other sectors show more resilience and greater confidence than manufacturing. Transport was the most optimistic sector of the economy in the third quarter, while the services sector in general is upbeat.
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