China Facing Balancing Act Will Face Challenges in 2015

The world’s second-largest economy, which is in the midst of transitioning towards a more sustainable consumption-led growth model, grew 7.5 percent in the second quarter, up from 7.4 percent in the previous three months.

“I would say the government will still need to be very proactive in putting together large infrastructure projects to hedge against the property slowdown, similar to what they have done this year,” he said.

A slowdown in the real estate sector has grave consequences for the economy as it accounts for around 15 percent of China’s GDP and is linked to some 40 other industries including cement, steel, chemicals and furniture.

Dariusz Kowalczyk, senior economist and strategist at Credit Agricole, also sees the economy slowing to around 7 percent next year. He expects the government will stimulate the economy less and lower its growth target.

via CNBC

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