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Chinese economic growth may be below 8 pct between 2011 Q3 and 2012 Q1: Report

Economic growth in China is likely to slow down to less than eight percent in the last quarter of 2011 and the first quarter of 2012 due to a cooling property market and sluggish foreign demand, according to a new report.

The Nomura Report said if China ''s economic growth reached less than eight percent in the first quarter of 2012; the government might loosen macroeconomic policies.

The Nomura Report said China’s housing market, which was experiencing a downturn would leader to slower growth, the Xinhua news agency reports.

The report predicted that the annual economic growth in 2012 would, however, exceed eight percent, as increasing construction of houses and loose macro policies would push up the growth.

The report comes in the wake of the Chinese Government imposing various measures to cool property prices, including higher down payments, limits on the number of houses that people can own, the introduction of a property tax in some cities and the construction of housing for low-income people.

The report predicted that investment in affordable housing before the second quarter of 2012 would be limited partly due to winter.

The report said the slowdown in the housing sector would adversely affect the demand and hence output for steel and cement and other construction material.

China’s economic slowdown is evident from the Purchasing Managers Index (PMI) data, which reached a 32- month low.

"The decline of the PMI indicated that industrial output growth may fall 11 to 12 percent in the next few months," HSBC China’s Chief Economist Qu Hongbin said.