Banks cut forecasts for China's growth in 2012

Both UBS and Citigroup cut their forecasts for China’s growth in 2012 due to worries in the domestic property market and Europe’s ongoing economic turmoil, Bloomberg reported. UBS cut its estimate of next year’s growth to 8%, down from 8.3%, while Citigroup lowered its forecast to 8.4%, down from 8.7%. Both figures are a decline from the 9.1% year-on-year growth in the third quarter of this year. “Much weaker euro zone growth will affect the rest of the world, including China,” said Wang Tao, Hong Kong-based UBS economist. Johanna Chua, chief economist for Asia at Citigroup, said that falling property prices are “the biggest risk to China’s economy,” but added that monetary and fiscal easing could prevent a hard landing. The move comes shortly after Goldman Sachs advised clients this week that they should dump Hong Kong-listed Chinese companies because “the balance of risks is no longer attractive.”