We think that the property sector is the top risk for the economy, given excess investment and the importance of the property sector in the overall economy. The growth slowdown might provide some opportunities for the growth model restructuring.

We do not expect the government to roll out new easing measures in April, as it will likely wait to see how the fiscal easing measures announced over the past several weeks affect the economy. We expect growth to slow in the second quarter, partly due to weak momentum in the property sector, and the government will likely have to ease policies further, particularly on the monetary side.

----- Zhang Zhiwei

RESEARCH ANALYST WITH NOMURA SECURITIES CO LTD

As discussed by many economists and the media, excess capacity, the shadow banking system, local government debt and the real estate market are the major causes for concern. The latter three are closely related because a majority of loans from the shadow banking system flow to the real estate sector, and another large portion goes to local government financing vehicles. As property turnover in the first quarter fell significantly and the property market came under great stress, credit quality in the sector became a problem. The increasing downward macroeconomic pressure and mounting debt are affecting credit assets in the local government debt sector.

Overcapacity is a perennial issue. The issue has become particularly severe in the past year, and I do not expect it to be resolved in the short term.

However, I would stress that so far, these risks are controllable. The simultaneous emergence of so many issues isn't necessarily a completely bad thing ... The earlier they emerge, the better.

Sectors such as energy conservation, environmental protection, urban utilities and healthcare will benefit from the urbanization drive. They are positive, despite the economic problems.

Yes. Actually, the central government has already rolled out some selected stimulus measures. That's necessary because if no fresh stimulus measures are offered, the economy might further weaken.

I do not think it is appropriate to further ease monetary policy to spur the economy, because the problem now is not a lack of money (actually, there is too much) but the lack of efficiency in the whole financial system.

If you look at how ordinary depositors are frustrated by banks' low interest rates, while many small firms are starved for cash, you will understand how low the efficiency is. China has to accelerate its liberalization of the financial sector to improve the efficiency of credit allocation. Simply scaling up money supply will not help.

There is a possibility that the economy may not have bottomed out during the first quarter. It could dip further. The real solution is acceleration of reform.

The implementation of promised reform agendas should be put into action rather just being talked about. If the government really changes, the market will give a quick, positive response.?

-----?Gary Liu

EXECUTIVE DEPUTY DIRECTOR OF THE CHINA EUROPE INTERNATIONAL BUSINESS SCHOOL LUJIAZUI INSTITUTE OF INTERNATION FINANCE

Declines in the manufacturing Purchasing Managers Index since December reflect an economic slowdown that continued through March 2014. While economic news out of the United States and Europe continues to be largely positive, the recovery in global demand growth - which is still very important to China's cycle - has remained tepid so far. Meanwhile, domestic economic activity slowed across the board in early 2014.

Despite the weak start to the year, we remain relatively constructive on China's economic growth outlook for this year. We continue to expect many of China's organic domestic growth drivers to remain in place, notably consumption, urbanization and services. Global demand growth is on a gradually improving trend, which will help China's economy this year.?

The manufacturing sector was weak in the first quarter. Further, investment growth decelerated as credit growth shrunk amid a firmer monetary stance, while companies remained reluctant to expand capacity. Growth in real estate investment also cooled.

Other parts of the economy may have been holding up better than manufacturing. Swings in manufacturing growth tend to be more pronounced than those in the services sector. Also, in China, the role of the services sector is increasing because of a changing growth pattern. In 2013, the services sector grew faster than industry, with the difference particularly pronounced in nominal terms because pricing power has also been better in services.

Therefore, the nonmanufacturing PMI held up better in recent months, and that's helped keep the labor market healthy.

The recent government work report and Premier Li Keqiang's recent comments underscore the fact China's leadership still attaches much importance to economic growth. The premier said: "To keep economic growth within a reasonable range is the basic requirement of macroeconomic controls - and it is also the long-term policy orientation."

As to the current outlook and the upshot for policy, we think Li basically confirmed that the government is going to take some measures to support growth. The policy measures he called for include accelerating the construction of key investment projects, in particular railways, highways and water projects in the central and western regions. Another facet is supporting the construction of affordable housing. This does not mean a major, or high-profile, stimulus plan, because these projects are already in China's medium-term plans.

But the call to accelerate them does matter, nonetheless, in terms of what it means for the macroeconomic policy stance.

In response to the economic data released so far, and taking note of the global trade trajectory, we've lowered our GDP growth estimate for the first quarter significantly.

We also slightly lowered the figure for the second quarter, which also affected the full-year GDP growth projection.

We now project GDP growth to have declined from 7.7 percent in the fourth quarter of 2013 to 7.5 percent in the first quarter this year, then to edge up to 7.6 percent in the second quarter.

Our forecast is 7.7 percent for the year as a whole.

How this growth will materialize in terms of organic growth and policy dynamics is more important than the numbers themselves, and the evolution of macroeconomic policy is key here.

We think that it would not be necessary or recommended to pursue expansionary policies even if GDP growth threatens to falls to 6.5 to 7 percent, given healthy labor market trends.

 -----Louis Kuijs

CHIEF ECONOMIST IN CHINA AT ROYAL BANK OF SCOTLAND PLC

Our estimate of first-quarter growth is 7.2 percent. China's slowdown is not a big surprise for me, as indicators at the beginning of the year pointed to a slowdown. And there are no signs of a significant rise in momentum.

The heavy industry and property sectors. China's economy largely relied on these sectors in the past decade, so we can understand how big the impact is if these industries slow down. The government will encourage the development of the services industry.

We don't think there will be a big stimulus. Pro-growth policies, if any, will be very small and targeted, which will help to moderate the slowdown. Those policies aren't likely to turn the trend around.

We expect economic growth to stabilize at about 7.2 to 7.5 percent.

Reforms such as interest rate liberalization and cleaning up banks' bad debt will be carried out in the foreseeable future.

? ----- Zhou Hao

CHINA ECONOMIST WITH AUSTRALIA AND NEWZEALAND BANKING GROUP LTD

We can expect a slowdown by looking at key economic indicators released in January and February. Many data have reached their nadir, even lower than those in 2009, in the aftermath of the financial crisis. So it is imperative that we pay serious attention to the downward trend.

One major factor dragging down growth is the changing momentum for economic development. China is in the process of shifting from the pure pursuit of GDP to rebalancing through systematic reforms. And such a shift is gradual and painful, because the ongoing anti-corruption campaign has in part contained and repressed investment. In general, local governments are giving cold shoulders to the current reforms.

Since the stagnation is largely triggered by an investment slump, industries related to investment are set to

the most affected. Steel, cement and real estate are among the most vulnerable sectors. Other relevant industries, such as home appliances and decoration, may also be hit hard.

Consumption or service industries will have better shots against the lackluster economy. Internet, telecommunications and medical care are likely to be the leading countercyclical industries.

In his latest speech, Premier Li Keqiang ruled out a major stimulus to fight short-term dips in growth in the world's second-biggest economy, dashing investors' hopes that the government would aggressively combat a slowdown in activity.

But we can still expect a stimulus that is significantly lower than the 4 trillion yuan injection in 2008. The core will be to enhance the effectiveness of investment. On the one hand, the government should carry out shantytown reconstruction.

The tax burden of small and medium-sized enterprises should be further mitigated to reinvigorate manufacturing and protect labor rights.

The second quarter is definitely critical to China's year-round economic performance. I would expect more substantial stimulus programs to be rolled out so that any continued slump can be effectively contained. Potential opportunities may lie in the relaxation of property-purchase restrictions in second-and third-tier cities in the hope that inelastic demands of homebuyers can be satisfied.
 

 ----- Shao Yu

CHIEF ECONOMIST, ORIENT SECURITIES CO LTD