China central bank surprises with 7% H2 growth forecast

Beijing

CHINA'S central bank governor said the economy could grow 7 per cent in the second half of this year, accelerating from the first six months and defying widespread expectations for a slowdown.

The uncharacteristically explicit growth forecast by Zhou Xiaochuan came just days ahead of a twice-in-a-decade Communist Party Congress, where President Xi Jinping is expected to strengthen his grip in a leadership reshuffle.

While China produced forecast-beating growth of 6.9 per cent in the first half, many economists and investors had expected momentum would start to fade later in the year.

Those views are largely predicated on three factors: higher borrowing costs; increasing curbs on home buying to cool soaring prices; and governm…