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HSBC lowers GDP estimate amid export concerns

By Wang Xinyuan (Global Times)

08:27, August 28, 2012

HSBC, Europe's largest bank by market value, lowered its forecast for China's gross domestic product (GDP) growth in 2012 to 8 percent from 8.4 percent amid concerns on the country's deteriorating exports and rising unemployment.

The export collapse has led to a lower projection on the GDP growth of the world's second largest economy, according to an HSBC report sent to the Global Times Monday.

Export growth dropped sharply to a mere 1 percent year-on-year last month, from 11.3 percent in June.

Many difficulties and uncertainties remain based on indicators such as sliding new export orders, the Xinhua News Agency cited Premier Wen Jiabao as saying during his recent tour to Guangdong Province.

Collapsing exports, falling corporate profits and rising inventory all increase the risk of a rise in unemployment, Qu Hongbin, HSBC's China chief economist, said in the report.

Qu said that the expectations of weaker-than-expected data will prompt the government to take more policy easing measures to support the economy, especially keeping the labor market stable will be a top policy priority, given the upcoming leadership transition.

The official unemployment rate is 4.1 percent in the second quarter of this year, according to the Ministry of Human Resources and Social Security.

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