Mr Wang Qing Hong Kong based Morgan Stanley chief Asia economist said he was relatively optimistic about China economic outlook and the world third largest economy was expected to expand by more than 10% this year.

He said that China consumer price index and the main gauge of inflation was likely to peak in July at 3.5% to 3.6%. For the entire year of 2010, he forecast the CPI to stand at around 3%.

Mr Wang said China economic growth in the second quarter this year slowed down to 10.3% which fell within Morgan Stanley expectation made early this year who attributed the slowdown to waning effects of the Chinese government's stimulus package and the increasingly higher quarterly comparative bases in 2009.

He expected China growth to continue slowing down in the second half, with the third quarter to expand by about 10% and the fourth quarter at about 9% or even lower.

He said that the accelerating slowdown in China economy to a simultaneous slowdown in the US and European economies as well as China's measures to cool down the property market.

Mr Wang maintained it was not of much significance regarding a slowdown and what really mattered was that whether the growth rates fell within expectations and within an acceptable range.

As inflation expectations started to go lower, Mr Wang said there could be little possibility for the People Bank of China or the central bank to raise the interest rate in the near future. He also expected Chinese financial institutions to meet their target of CNY 7.5 trillion in new loans for 2010.

(Sourced from Xinhua)