The World Bank’s forecast of China’s economic growth went down from 8.2% to 7.7% amid the dwindling economy of the nation caused by economic problems in two of its key markets, the Eurozone and the US.
The weak demand for China’s exports and the country’s lower investment growth have been significant this year, making it difficult for policymakers to booth domestic demand enough to offset the decline in foreign sales.
China unveiled a number of stimulus measures, including record lending by state-owned banks, to maintain a high rate of growth. The result was a sharp increase in property prices in the country, causing fears about asset bubbles being formed.
Prompted by those fears, policymakers have been trying to curb lending in recent times.
While the moves have helped to keep property prices in check, there have been concerns that they may have hurt China’s growth.
The role of investment in China’s growth has also reduced over the past year, indicating that Beijing may be trying to rebalance its economy, said the World Bank.