Two banks cut China growth forecast

Economists at JPMorgan and Barclays have cut their China growth forecasts amid economic woes stemming from weak domestic demand, falling exports and a weakening real estate sector. Economic woes stemming from weak domestic demand, falling exports and a weakening real estate sector in China are prompting investment banks to issue downward growth forecasts. JPMorgan economists, who had predicted that China would grow 6.4 percent this year in early May, have sharply revised down their forecast to 4.8 percent. The bank expects the Chinese economy to grow 4.2 percent next year, putting growth below the official 5 percent target for three consecutive years. Barclays economists also lowered their 2023 China growth forecast by 0.4 percentage points to 4.5 percent following the release of economic data on Tuesday. The real estate woes are also spilling over into China’s shadow banking sector after Country Garden missed a bond payment. Wang Qianq, director of Zhongrong International Trust, told investors that they had missed payments on a number of products as of August 8. According to sources familiar with the matter, Wang reported that payments were delayed on at least 30 products, some of which were short-term instruments. The People's Bank of China's moves continue. The bank set a higher-than-expected yuan reference rate and injected the largest amount of liquidity into the market since February.