China's growth slowed for a sixth quarter to the weakest pacesince the global financial crisis, putting pressure on Premier WenJiabao to boost stimulus to secure a second-half economicrebound.

Gross domestic product expanded 7.6 percent last quarter from ayear earlier, the National Bureau of Statistics said today inBeijing. The pace, a three-year low, compares with an 8.1 percentgain in the previous period and the 7.7 percent median forecast ofeconomists. Industrial production increased at a slower pace inJune while retail sales growth decelerated.

Today's data painted a mixed picture from a pickup infixed-asset investment that could signal the economy is stabilizingto the warning sign that electricity output failed to increase inJune from a year earlier. Singapore reported an unexpected economiccontraction as China's slowdown undermines a global recoveryalready threatened by Europe's debt crisis and limited U.S. jobgrowth.

“The fact that the data shows persistent weakness –rather than aprecipitous plunge — means policy makers are likely to continueincremental monetary accommodation but not embrace a moreaggressive fiscal stimulus policy response in the immediate term,”said Ramin Toloui, Singapore-based global co-head ofemerging-markets portfolio management at Pacific InvestmentManagement Co., which manages the world's largest bond fund.

The yuan weakened for a third day and headed for the biggestweekly decline in six weeks, falling less than 0.1 percent to6.3760 against the dollar at 12:05 p.m. in Shanghai. The benchmarkShanghai Composite Index was little changed after two days ofgains.

Export Slowdown

China's export growth in the first half cooled to 9.2 percent,down from 24 percent in the first six months of 2011, as Europe'sausterity measures and government debt burdens capped shipments.Also dragging on demand is a crackdown on housing-marketspeculation.

China can't relax the property curbs, which have reigned inspeculation and investment in real estate, Sheng Laiyun, spokesmanfor the National Bureau of Statistics, said at a briefing today.The economic slowdown is partly the result of a decline in China'spotential growth rate after more than 30 years of high-speedexpansion, Sheng said. He said bearish views on the economy areunfounded and that industrialization and urbanization willhelp.

Estimates for growth in the world's second-biggest economy in aBloomberg News survey of 38 analysts ranged from 7.3 percent to 9.3percent, with all except one predicting a slowdown from the firstquarter.

First-half expansion was 7.8 percent, the statistics bureausaid. Wen in March set a 7.5 percent growth target for this year,down from an 8 percent goal in place since 2005.

The People's Bank of China on July 5 announced the secondinterest-rate cut in a month, adding to the first since 2008. Thecentral bank also widened the discount available to most borrowersto 30 percent from 20 percent off the benchmark rate. Authoritieshave lowered banks' reserve requirements three times starting inNovember to spur lending and support growth.

Wen pledged to intensify fine-tuning of policies as downwardpressure on the economy remains “relatively large,” according to aJuly 8 report by the official Xinhua News Agency. At the same time,the premier said authorities will “unswervingly” sustain propertycontrols and prevent a rebound in prices, Xinhua said.

Excavator Sales

Sany Heavy Industry Co., China's biggest maker of excavators,lowered its annual unit-sales forecast, Vice Chairman Xiang Wenbosaid in a July 11 interview. A “meaningful recovery” in demand forearth-moving equipment may not be visible until the first quarterof next year, Xiang said.

“The Chinese economy has slowed, but it is not collapsing asmany fear,” said Shane Oliver, Sydney-based head of investmentstrategy at AMP Capital Investors Ltd., which manages almost $100billion. “Past policy easing plus more to come suggests that growthwill pick up to around an 8 percent pace over the second half.”

U.S. companies are feeling the effects of China's deceleration.Advanced Micro Devices Inc., the second-biggest maker of processorsfor personal computers, this week reported an unexpected drop inquarterly sales in part because of weakness in China. Cummins Inc.,a maker of truck engines, reduced its revenue forecast, sayingdemand in Brazil, China and India isn't improving as the companyanticipated.

China's industrial production expanded 9.5 percent in June froma year earlier, the statistics bureau said, comparing with the 9.8percent median estimate in a Bloomberg survey. Fixed-assetinvestment excluding rural households increased 20.4 percent in thefirst six months from a year earlier, the data showed, versus 20.1percent in the first five months and a 20 percent forecast.

Retail sales advanced 13.7 percent last month from a yearearlier, compared with the 13.4 percent median forecast ofeconomists. Data earlier this week showed that imports rose lessthan estimated in June while export growth slowed and new yuanloans topped predictions.

Promoting investment growth is key to stabilizing the economicexpansion, Wen said during meetings with economists and companyexecutives July 9 and 10, according to a government statement. Theremarks may signal public investment is likely to rise in thecoming months, Nomura Holdings Inc. said.

Rio Tinto Group, which counted on China for 31 percent of its$61 billion in sales last year, expects growth in the nation toaccelerate in the second half on the recent fiscal and monetaryloosening, Vivek Tulpule, chief economist of the world'sthird-largest mining company, said in London on June 29.

Singapore Contraction

Singapore's GDP fell an annualized 1.1 percent in the threemonths through June from the previous quarter, when it climbed arevised 9.4 percent, the Trade Ministry said today. The median of14 estimates in a Bloomberg News survey was for a 0.6 percentgain.

Also today in the Asia-Pacific region, the Bank of Korea reducedits 2012 economic-growth forecast for the second time this year, aday after it unexpectedly cut interest rates.

Elsewhere, Russia will refrain from reducing interest rates fora seventh month today, after a surge in inflation in June,according to economists surveyed by Bloomberg News. Spain and Italywill report inflation data today.

In the U.S., wholesale prices probably fell 0.5 percent in Junefrom May, compared to a 1 percent drop the previous month,economists predicted.

Bloomberg News

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