BEIJING - The OECD cut its growth forecast for China's economy on Tuesday, citing a still-unresolved euro zone crisis that could mute demand for Chinese exports for months to come.
Although the world's No 2 economy is snapping out of its worst sequence of slowing growth in three years, and rising property and infrastructure investment are pointing to a rebound expected to last to 2014, the OECD cautioned that exports would remain a weak spot.
Underscoring the risks to growth, the OECD lowered its growth forecast for China to 8.5 percent next year, down from a 9.3 percent prediction made in May.
But that is still markedly higher than market estimates of 7.8 percent in the consensus Reuters poll taken last month in the wake of third-quarter GDP data.
The Chinese economy should grow 7.5 percent this year, the Paris-based group said in its latest report on the global economic outlook, with growth cresting at 8.9 percent in 2014.
"The economy will still face external headwinds," the OECD said. "By past standards, export growth is set to remain subdued."
Growth in exports should not exceed 9 percent over the next two years, the group said, a sharp slowdown from the past decade when annual growth averaged around 22 percent.
If the crisis in the euro zone - the biggest buyer of Chinese exports - worsens, China's gross domestic product growth would likely slip 0.6 percentage points in 2013, and 1.3 percentage points in 2014, the OECD said.
It said the scenario it designed for a worsening euro zone crisis assumes a 40 percent drop in stock market prices, and 300-basis-point rise in long-term government bond yields in euro zone nations under market pressure over a period of two years.
"The OECD as a whole would move into recession," said the report from the policy think-tank to the world's richest countries and its most influential emerging economies.
"China and other emerging market economies would not be immune from this shock."
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