(Bloomberg.com)
Updated: 2007-04-17 11:42

'Stress Test'

"If the actual CPI inflation exceeds 3 percent, we believe it could be a stress test on the People's Bank of China's comfort zone for inflation," said Liang Hong, an economist at Goldman Sachs Group Inc in Hong Kong.

While the government tries to cool lending, companies are bypassing banks to tap the stock market for money. Angang Steel Co., China's third-largest steelmaker by production, plans to sell shares to fund a 22.6 billion yuan steel mill.

China's economy will likely expand a slower 10 percent in the second quarter because of decade-high growth in the same period last year, the economists said. GDP will probably grow at 9.9 percent in 2007, the first deceleration in six years, the survey showed.

Economists at HSBC Holdings Plc, Credit Suisse Group and Goldman Sachs Group Inc raised annual growth forecasts from March as the trade surplus surged.

Growth in India, the world's second fastest-growing major economy, was 8.6 percent in the fourth quarter.

The following table shows economists' estimates for percentage changes in China's gross domestic product in the first and second quarter and in 2007 from a year earlier.

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