The Bank of England said it was pretty sceptical about China hitting its 7% growth target this year, in meeting minutes published today.
Whether Chinese policies aimed at stimulating internal demand will actually work is “a key uncertainty,” the Bank said. The Bank also said that an “underlying slowdown” in investment and lending might last longer than people think.
China surprised the markets this month, producing official data to show real GDP growth at 7.0% in the second quarter, above analysts’ estimates of 6.9%.
But not everyone believes the numbers. Citigroup said in a note this week that China is inflating its figures and “in practice, ‘genuine’ GDP growth probably is below 5%.”
Chinese stocks have fallen by more than 30% since the middle of June, and may keep going if sceptical voices like these keep piling up.