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 However, a slight pick-up in parts of the world's second-biggest
economy does not mean a solid, broader recovery is underway.
Investment -- an important driver of growth -- is forecast to slow
further as China embraces sweeping financial reforms, and some
market watchers believe a downturn in the housing sector may worsen
in coming months.
Signs of only patchy improvement overall and a sharper deterioration
in the property market would reinforce speculation that the
government will loosen policy further to shore up the economy,
following a series of modest measures in recent months.
"We think the government may have to relax property policies," said
Wang Tao, an economist at UBS Bank in Hong Kong. "The ongoing
property downturn is expected to create a bigger drag to the economy
in the fourth quarter and in 2015."
Please click on [ID:nL3N0OM062] for a table of forecasts.
Factory production is estimated to have risen 8.8 percent in May
from a year ago, the median forecast of 22 analysts showed, edging
up from April's 8.7 percent.
Retail sales likely rose 12.1 percent up only a shade from April's
11.9 percent.
Export growth, which whip saws from month to month but has steadily
declined in the past four years, is expected to show the sharpest
rebound by rising 6.6 percent in May, compared to April's scant 0.9
percent rise.
Imports are seen expanding 6.1 percent, up from April's 0.8 percent
gain.
A rebound in trade would affirm the buoyant results of two separate
surveys of China's factory sectors in the past week. Both polls
indicated that manufacturers had their best performance in four or
five months in May as foreign and domestic demand rose.
[ID:nL3N0OG30H] [ID:nS7N0MG03P]
NO TURNAROUND YET
Yet a stronger trade performance may be offset by persistent
weakness in investment, which accounted for a hefty 54 percent of
China's annual economic growth last year.
Fixed asset investment is seen rising 17.1 percent between January
and May compared to the same period last year, down from a 17.3
percent rise in the first four months of the year.
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Mirroring the lethargy in capital spending, growth in credit and
money supply is also believed to have flagged. The M2 money supply
is seen up 13.1 percent in May compared to a year ago, down a touch
from April's 13.2 percent rise. The amount of new loans disbursed
by banks is also estimated to have fallen to 750 billion yuan ($120
billion) last month, from April's 774 billion yuan.
In a sign of the times, producer prices are forecast to have dropped
for the 27th consecutive in May by 1.5 percent, though annual
consumer inflation is seen quickening to 2.4 percent, due partly to
rising pork and egg prices.
"May is unlikely to be the month for a turnaround," economists at
Daiwa Capital Markets said in a note.
"Moreover, the recent real estate market malaise makes us nervous
about gross domestic product growth in 2014-15."
China's property market is grappling with a slowdown, hurt by less
funding for developers and falling home sales following last year's
upbeat performance.
Despite the moderation, Chinese home prices are still at record
highs, but rising less quickly -- they rose 6.7 percent in April on
an annual basis, the weakest pace in 11 months.
Trade data will be released on June 8, inflation on June 10 and
industrial output, retail sales and urban investment on June 13. New
loan and money supply data will be issued June 10-15.($1 = 6.2541
yuan)
(Reporting by Koh Gui Qing; Editing by Kim Coghill)
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