China's Property Market.jpg (Photo : REUTERS)
China's tremendous economic growth for the past year may start cooling down to its floor level of 6.8 percent in the first half of 2015.
The country is said to be currently experiencing dwindling property investment rates. Aggravating this is the lower income on land transaction fees, a report claims.
According to a Deutsche Bank report published on Jan. 6, Tuesday, growth in China is being hampered by declining property investment and lower land transaction fees.
Zhang Zhiwei, chief China economist and head of China equity strategy at Deutsche Bank, said in the report that the cooling down can be seen up to the third quarter before some growth can be experienced.
"A further cooling down in economic growth will appear in the first two quarters and then growth will rise back to about 7 percent in the second half of the year along with government's stimulus measures," Zhang detailed.
The expert added that the bank is anticipating two more interest rate cuts and then two more reductions in banks' reserve requirement ratio this 2015.
Government revenues were highly affected because of the lower income earned through land transaction fees. This is bound to be the riskiest factor in the country's economic growth in 2015, the report claimed.
The bank warned that government revenue might demonstrate its first negative growth in the first quarter. Moreover, it would likely achieve its slowest annual growth level since 1981.
Because of the sluggish property sector, China's economic growth level was at a five-year low of 7.3 percent in the third quarter of 2014.
