Unless we get positive news to offset this, tomorrow could see the markets tumble. Is it a catastrophic event? Not even close. But the traders and those prone to panic will be hitting the sell button.

Man, some of the bargains out there are getting mighty tempting. CUU has held its price pretty well compared to many other juniors over the past few weeks.

China’s Growth Slows to Three-Year Low of 7.6%

China’s growth slowed for a sixth quarter as trade and manufacturing decelerated, putting pressure on Premier Wen Jiabao to boost stimulus to secure a second-half economic rebound.

Gross domestic product expanded 7.6 percent last quarter from a year earlier, the National Bureau of Statistics said today in Beijing. The pace, a three-year low, compares with an 8.1 percent gain in the previous period and the 7.7 percent median forecast of economists. Industrial production increased at a slower pace in June while retail sales growth decelerated.

Wen may need to build on monetary easing and keep increasing investment to reverse the deepest downturn since the global financial crisis as the ruling Communist Party prepares for a once-a-decade leadership change this year. An extended China slowdown would further imperil a world recovery already threatened by Europe’s debt crisis and weakening U.S. job growth.

“The question is not how deep the economy falls, but how long it will stay low,” said Dong Tao, Credit Suisse Group AG’s Hong Kong-based chief China economist. “China needs structural reforms, not just monetary or fiscal expansion.”

The yuan weakened for a third day to the lowest since November, falling 0.1 percent to 6.3771 against the dollar at 10:26 a.m. in Shanghai. The benchmark Shanghai Composite Index rose 0.1 percent after gaining as much as 0.6 percent. Today’s report wasn’t as bad as some investors expected, Tao said.

Export Slowdown

China’s export growth in the first half cooled to 9.2 percent, down from 24 percent in the first six months of 2011, as Europe’s austerity measures and government debt burdens capped shipments. Also dragging on demand is a crackdown on housing-market speculation. Any failure to secure a rebound this quarter may increase pressure on Wen to ease property controls.

Estimates for growth in the world’s second-biggest economy in a Bloomberg News survey of 38 analysts ranged from 7.3 percent to 9.3 percent, with all except one predicting a slowdown from the first quarter.

First-half expansion was 7.8 percent, the statistics bureau said. Wen in March set a 7.5 percent growth target for this year, down from an 8 percent goal in place since 2005.

The People’s Bank of China on July 5 announced the second interest-rate cut in a month, adding to the first since 2008. The central bank also widened the discount available to most borrowers to 30 percent from 20 percent off the benchmark rate. Authorities have lowered banks’ reserve requirements three times starting in November to spur lending and support growth.

Economic Pressure

Wen pledged to intensify fine-tuning of policies as downward pressure on the economy remains “relatively large,” according to a July 8 report by the official Xinhua News Agency. At the same time, the premier said authorities will “unswervingly” sustain property controls and prevent a rebound in prices, Xinhua said.

U.S. companies are feeling the effects of China’s deceleration. Advanced Micro Devices Inc. (AMD), the second-biggest maker of processors for personal computers, this week reported an unexpected drop in quarterly sales in part because of weakness in China. Cummins Inc. (CMI), a maker of truck engines, reduced its revenue forecast, saying demand in Brazil, China and India isn’t improving as the company anticipated.

China’s industrial production expanded 9.5 percent in June from a year earlier, the statistics bureau said, comparing with the 9.8 percent median estimate in a Bloomberg survey. Fixed- asset investment excluding rural households increased 20.4 percent in the first six months from a year earlier, the data showed, versus 20.1 percent in the first five months and a 20 percent forecast.

Investment Growth

Promoting investment growth is key to stabilizing the economic expansion, Wen said during meetings with economists and company executives July 9 and 10, according to a government statement. The remarks may signal public investment is likely to rise in the coming months, Nomura Holdings Inc. said.

Retail sales advanced 13.7 percent last month from a year earlier, compared with the 13.4 percent median forecast of economists. Data earlier this week showed that imports rose less than estimated in June while export growth slowed and new yuan loans topped predictions.

The slowing economy has hurt corporate earnings and taken a bigger toll on companies in building-materials industries.

Angang Steel Co., China’s largest Hong Kong-traded producer of the alloy, said July 6 that it probably swung to a loss in the first half after prices plunged. The cost of steel fell this month to the lowest in two years.

Sany Forecast

Sany Heavy Industry Co. (600031), China’s biggest maker of excavators, lowered its annual unit-sales forecast, Vice Chairman Xiang Wenbo said in a July 11 interview. The government “has enough capability to maintain economic growth,” Xiang said.

The expansion may have bottomed out last quarter, Ding Shuang, a Hong Kong-based economist with Citigroup Inc., said before the release. Inflation, which eased to a 29-month low of 2.2 percent in June, allows more room for policy easing, said Ding, who previously worked for China’s central bank.

Rio Tinto Group, which counted on China for 31 percent of its $61 billion in sales last year, expects growth in the nation to accelerate in the second half on the recent fiscal and monetary loosening, Vivek Tulpule, chief economist of the world’s third-largest mining company, said in London on June 29.

--Zheng Lifei. With assistance from Ailing Tan in Singapore, Cynthia Li in Hong Kong and Kevin Hamlin and Nerys Avery in Beijing. Editors: Scott Lanman, Paul Panckhurst

http://www.bloomberg.com/news/2012-07-13/china-s-growth-slows-to-three-year-low-of-7-6-.html