ADB cuts China growth forecast

Beijing should act faster to transform the mainland's economic growth pattern, boosting domestic consumption effectively and cutting its reliance on investment and exports, because growth is continuing to lag expectations, the Asian Development Bank (ADB) said yesterday.

The Manila-based lender again reduced its forecast for mainland economic growth this year - the second time in three months - citing slow investment growth due to a sudden pullback in credit and expectations of single-digit growth in both exports and imports for the remainder of the year.

The bank now expects the world's second largest economy to grow by 7.6 per cent this year, down from July's forecast of 7.7 per cent and April's forecast of 8.2 per cent.

It expects gross domestic product growth of 7.4 per cent next year, down from its April forecast of 8 per cent.

"The Chinese central government will have to carry out a delicate balancing act of encouraging sustained robust growth through reforms and stimulus, while continuing to mitigate risks in the financial sector through careful monetary policy management," ADB chief economist Changyong Rhee said in Hong Kong yesterday.

"Authorities must continue with structural measures to help lift the economy, putting greater emphasis on domestic consumption and less on investment."