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Chinese economy still on sound footing

By Chen Jipeng and Hu Junxin (Xinhua)

08:22, July 20, 2012

SINGAPORE, July 19 (Xinhua) -- Chinese policymakers are maneuvering to continue economic restructuring despite a slowdown. Analysts say the world's second largest economy remains on track for sustained growth.

Official statistics released last week show that China's gross domestic product slowed to 7.6 percent in the second quarter, the lowest level in three years. Industrial production growth also dropped to a record low of 9.5 percent year-on-year since 2009, below market expectations of 9.8 percent.

Economists told Xinhua that the market has fully digested the news and remains comfortable with the economic fundamentals of China after initially mixed responses to the relatively weak figures.

Beijing has set a full-year growth target at 7.5 percent for 2012 but the actual growth has typically exceeded the mark in the past.

"The last couple of numbers are at the lower end of the comfort zone. That's why they (market economists) are a bit worried. They are OK with the numbers slowing down ... still in the comfort zone," said Song Seng Wun, a regional economist at CIMB Research in Singapore.

Wellian Wiranto, an Asia investment strategist at Barclays Wealth, also said that the second quarter GDP growth figures, though relatively low, came well within market expectations and are likely to be the trough for the year.

Song said the numbers reflected a slowdown in economic activities in the beginning of the second quarter, but the latest advancing indicators, such as the purchasing managers' indices for key services, showed that activities have been slightly firmer toward the end of the second quarter.

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