JPMorgan has cut its forecast for China's economic growth this year to 8.9 percent as exports are likely to slump amid a global economic slowdown, with a decline also seen for next year.
The growth in the world's second-largest economy this year is set to drop from the previous estimate of 9 percent and may moderate further to 8.5 percent in 2012, Jing Ulrich, JPMorgan's managing director and chairman of global markets for China, said yesterday in Shanghai.
The investment bank revised its forecast downwards for China, the world's largest exporter, 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, Ulrich said. The US economy may grow 1 percent this year while expansion for the eurozone is cut to 1-1.2 percent, JPMorgan projected.
Net exports, one of the three pillars in China's economy along with investment and consumption, contributed a negative 0.43 percentage point to the country's gross domestic product growth in the first quarter and a minus 0.1 percentage point in the second quarter, versus record high of 18.1 percent in 2007, Ulrich said.