Downgrade looms for China's growth projection

China’s GDP growth shifted down to 7.5 per cent in the second quarter from 7.7 per cent in the first quarter.
 The average for the first six months was 7.6 per cent. The FPO did not think China will return to racing at double digits like before even though the second half is likely to recover, Kulaya Tantitemit, acting director of the office’s Macroeconomic Policy Bureau, told a seminar on “China Economic Brinkmanship: Will China trigger a new economic crisis?” organised by Kasikornbank yesterday
China is dragging down the Thai economy because its massive market absorbs 11.7 per cent of Thailand’s exports. Thai exports to China last quarter dropped by 13.4 per cent, she said.
In the FPO’s worst case scenario, if China’s economy grows by only 5.1 per cent, it will impact Thailand’s GDP growth by 1.3 percentage point. That means Thai GDP this year would expand only 2.7 per cent instead of 4 per cent, she said.
Chengsi Zhang, head of the monetary finance department of the School of Finance at Renmin University in China, said that in restructuring its economy, China will focus on quality growth.
 The scale of growth will no longer be bigger than in previous years.
China is looking for new opportunities in various industries from those it used to rely on such as property.
There are no property bubbles in China but maybe some froth.
Despite the economic slowdown, China was not a crucial problem in driving global economic growth in the long term, he said.
Kulaya said that the property market in China is at risk of overheating because the country has relied on domestic rather than overseas demand .
Banthoon Lamsam, chairman of KBank, said in his opening speech that China is going through a cycle like that experienced by the US and Europe.
China alone cannot carry the global economy. Yet, the slower growth of China is not at the danger level and Thailand, which has trade activities with China, should prepare to defend itself from the fluctuations of the China economy.
China is still a key market for Thailand despite the slowdown, as its growth rate of 7 per cent outstrips those of other major economies, he said.
On the sidelines of the seminar, Banthoon said that amid the economic slowdown globally and in Thailand, operators should focus on how to prepare to keep in business, while the bank will play a role in helping customers.
The bank has not changed its loan growth target of 10 per cent for this year, he added.