Chinese GDP growth may slow to 7% in 2015 on weak property

Growth in China's gross domestic product may slow to 7 percent next year due to a weakening property market, a top state think tank said in a report published yesterday.

"A real estate industry adjustment of three to five years will influence negatively the nation's economy," the State Information Center said.

Real estate sales took up 14.3 percent of China's GDP in 2013 while the global average was 8 percent, according to the report. The SIC forecasts a 9 percent cut in property sales in each of the next three years, which leads to less investment in the sector and inevitably hurts GDP.

"The country's economic growth will gradually slow, and is expected to grow around 7 percent in 2015," the SIC said in the report published in the China Securities Journal.

"The growth of the world economy may recover slightly in 2015, but it will be difficult to see it fully recovering from weakness seen since the global financial crisis," the SIC said.

China's economic growth eased to a five-year low of 7.3 percent in the third quarter of this year, down from 7.5 percent in the second quarter.

On December 19, the National Bureau of Statistics revised up the size of the economy by 3.4 percent to around 58.8 trillion yuan (US$9.5 trillion) in 2013.

The SIC also predicted the Consumer Price Index to rise under 2 percent in 2015 from a forecast of above 2 percent this year while export growth may rise to 7 percent from a forecast of 6 percent.

The Chinese Academy of Social Sciences, another Beijing-based government think tank, last month projected economic growth to slow to 7.3 percent this year, below the government's annual target of 7.5 percent.