SEOUL, July 28 (Yonhap) -- China's economy will be hard pressed to sustain a 7.5 percent growth level reached in the second quarter for the rest of the year, mainly due to faltering consumer spending and the sluggish real estate market, a local think tank said Monday.
According to the Institute for International Trade (IIT), concerns that the world's second-largest economy will experience a "hard landing" this year have been dispelled to a large extent, but it is also unlikely China's growth will accelerate and reach levels tallied for last year.
"China benefited from economic growth in the United States and European Union in the last quarter, as well as from the so-called mini stimulus programs announced by Beijing that improved consumption, investment and production," the institute under the Korea International Trade Association said.
It said although worries about the slacking off of exports and fallouts of the "shadow financial" sector have eased in recent months, acceleration of industrial restructuring, weak consumer demand and the sluggish real estate market effectively precluded any strong upward gains in the second half.
It added high economic growth reached in the July-December period of 2013 created a high base effect that will make it very hard for the Chinese economy to post high growth numbers in the coming months.
"Despite second quarter numbers exceeding most market expectations, many global investment banks were predicting China's growth to hover at around 7.4 percent for the whole of this year," the IIT said. This, it said, is well shy of 7.7 percent growth reached in China last year.
The institute said drop in China's growth will cause South Korean exports to the country to decrease this year, which will require South Korean companies to focus more on entering China's service market, instead of just using China as a manufacturing base to ship products to other markets.
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