China's economic growth is expected to fall to 7.6 percent in the second quarter before rebounding to 8.2 percent three months later, Bank of China Ltd forecast in a quarterly report on Thursday.
"Currently the economy is struggling at a dividing line between 'somewhat cold' and 'too cold'," said Zhou Jingtong, a senior economist at the bank's Institute of International Finance. He said a "comfortable" zone for Chinese economic growth is between 8.5 percent and 9.5 percent, where the economy operates well with sound employment. Although growth will rebound, "the short-term economic rebound may only be a result of policy stimulus" and does not imply there is independent growth in China's economy, the bank said in the report.
Growth in China's economy slowed to 8.1 percent in the first quarter, the weakest in nearly three years. And the HSBC Purchasing Managers' Index fell to a 39-month low in June, indicating that the economy is still contracting.
The official PMI may drop to 49.8 this month, falling below the dividing line of 50 between expansion and contraction, according to a survey conducted by Bloomberg. The figure is scheduled to be released on July 1.
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