China's economy has enjoyed a double-digit growth rate for a over a decade now, but it is likely to slump below 9 per cent this year amid the global economic slowdown, according to a forecast by JPMorgan.
"Growth of the world's second-largest economy this year is likely to be lower than the previous estimate of 9 per cent and may moderate further to 8.5 per cent in 2012," JPMorgan's Managing Director and Chairman of Global Markets for China, Jing Ulrich, said.
India's GDP growth slows down to 7.7% in Q1
The investment bank revised its forecast for China, the world's largest exporter, downward due to faltering growth in the United States, the European Union and Japan, China's top three trading partners, who together absorbed almost half of the country's exports, the Shanghai Daily quoted Ulrich as saying.
US economy grew just 1% in second quarter
The US economy may grow at 1 per cent this year, while expansion in the euro zone is likely to be around 1-1.2 per cent, JPMorgan projected.
A slowdown in net exports, one of the three pillars of China's economy along with investment and consumption, had a negative 0.43 percentage point impact on the country's gross domestic product growth in the first quarter and a minus 0.1 percentage point impact in the second quarter, versus a record high of 18.1 per cent in 2007, Ulrich said.
China has announced a shift in its economic paradigm with effect from this year to reduce reliance on falling exports and increase domestic consumption.