beijing nomuras chief china economist ting lu cut his forecast for chinese gdp growth this year as factories shut down to comply with carbon emissions reduction targets markets now are so perplexed by the fallout of the property sector that they may ignore beijings unprecedented curbs on energy consumption and energy intensity lu said in a note friday as a result he expects chinas gdp to grow by 77 this year down from 82 previously forecast chinese president xi jinping announced in september 2020 that china would reach peak carbon emissions by 2030 and become carbon neutral by 2060 thats kicked off national and local plans to reduce production of coal and other carbonheavy processes meanwhile worries about indebted chinese property giant evergrandes ability to stay afloat has roiled global markets in the last week the real estate market along with related industries such as construction accounts for more than a quarter of chinas gdp according to moodys estimates published in a late july report fitch on thursday lowered its china growth forecast to 81 from 84 on expectations a slowdown in the property market puts pressure on domestic demand other economists havent cut their 2021 china gdp forecasts yet but are watching a rising number of drags on growth   macquaries chief china economist larry hu said in an email monday his 85 gdp estimate set a year ago is facing downside risk now given property slowdown and production cut   china renaissances bruce pang head of macro and strategy research said monday the firm hasnt yet changed its gdp forecast of 84 either but he said there could be a downward revision to 825 or 83 if the electricity shortage is prolonged hitting not just energyintensive industrial manufacturing but local livelihood and even services   allianz subsidiary euler hermes senior economist francoise huang said in an interview thursday she is maintaining her gdp forecast of 82 for now until she can get more clarity on how much of a downward revision she needs to make the central government in march set a much lower gdp target of over 6 expansion for the year analysts have noted policymakers are far more interested in the quality of economic growth than its pace we believe it is unrealistic to expect china to maintain high and stable growth as beijing delivers substantial shocks to both supply and demand sides nomuras lu said in his report friday on the supply side he pointed to a game changer in midaugust when the national economic planning agency announced that 20 regions accounting for about 70 of chinas gdp failed to meet carbonrelated targets prompting local authorities to quickly take action regarding demand shocks lu said chinas recent sweeping regulatory crackdown on internet platforms fintech video games offcampus tutoring ridehailing data privacy food delivery crypto miners and ecigarettes have been significant the crackdown on offcampus tutoring may be especially negative for growth in q3 and q4 this year as the entire sector has been decimated he lowered quarterly gdp forecasts to 47 yearonyear growth in the third quarter and 3 in the fourth chinas official release on thirdquarter gdp is due out oct 18 the accuracy of government data is frequently doubted chinese authorities efforts to reduce high reliance on debt in the massive real estate sector in the last year have sent shares of indebted developer china evergrande tumbling the company has remained silent on an 83 million interest payment on its us dollardenominated debt that was due thursday the firm has a 30day grace period if evergrandes troubles prompt a 10 percentage point slowdown in residential property activity that could drag gdp growth down by roughly 1 percentage point morgan stanleys chief asia economist chetan ahya said in a note sunday citing analysis from the firms chief china economist robin xing ahya added the slowdown could result in a decline in private consumption and a drop in property investment that subsequently lowers fixed asset investment in related manufacturing sectors these spillover effects are creating downward pressure on growth at the same time that production cuts to meet energy intensity targets are weighing on growth ahya said the regulatory reset is weighing on corporate sentiment and consumption is softening because of intermittent covidrelated restrictions if the constraints on energyintensive production remain the morgan stanley analysts expect fourthquarter gdp growth will be dragged down by about 1 percentage point the investment bank currently forecasts 45 gdp growth in the third quarter from a year ago and a slower 4 pace in the fourth quarter as negative factors add up analysts expect chinese authorities to ease policy and support growth the government has not loosened policies because the economic pressure is not high enough zhiwei zhang chief economist at pinpoint asset management said in a note sunday in particular the unemployment rate has been relatively stable and export growth has also been strong the government may think they can afford to wait till the year end to loosen policies he noted that the overseas market is not nearly as worried about a hard landing in chinas economy compared with previous declines in the msci china index the drop in stocks this year has not affected the yuan exchange rate zhang said there is no sign of capital outflow and the gap between the offshore yuan exchange rate and the onshore exchange rate did not widen this shows that the current evergrande incident has not caused panic on chinas macro economy in the international market the msci china index has fallen more than 18 so far this year it tracks shares of chinese companies traded in the mainland hong kong and the us the offshoretraded yuan has fallen about 066 so far this year its gap with the onshoretraded yuan has remained within a range with an absolute value of 0043 yuan according to wind information