(Yicai) July 9 -- China’s economy in the second quarter may slow down compared with the first quarter, as the macroeconomy is still transitioning from old to new growth drivers, according to the average prediction of chief economists polled by Yicai this month.

The average forecast is for 4.5 percent growth in gross domestic product in the second quarter, slower than the 5 percent growth in the first quarter, the survey of 14 leading economists in China revealed. Their prediction for the full year remained unchanged at 4.7 percent from last month.

The National Bureau of Statistics is scheduled to release the main economic data for June, the second quarter, and the first half on July 16.

The trajectory of China’s economy is highly dependent on the prosperity of artificial intelligence, said Guan Tao, chief economist at Bank of China International. If the AI boom reverses or external conditions change, the domestic economy could face unexpected fluctuations, he noted, adding that it is essential to prepare policy reserves in advance and formulate response plans to proactively counter the uncertainties in both internal and external environments.

Future macroeconomic policies will remain a combination of more proactive fiscal policy and moderately accommodative monetary policy, according to Wang Han, chief economist at Industrial Securities. After facing significant economic growth pressures in the second quarter, there is a possibility that fiscal policy in the second half will be strengthened, but the likelihood of further cuts in the reserve requirement ratio and interest rates is relatively low, Wang noted.

The Yicai Chief Economists Confidence Index, compiled by the Yicai Research Institute to evaluate confidence in China’s economic outlook, fell to 49.7 in July from 49.9 in June, remaining below the boom-bust line of 50 for the second consecutive month.

The surveyed economists expect that macroeconomic policies will continue to be strengthened in the second half to achieve stable growth.

Fixed asset investment likely fell 4.7 percent in the first six months from a year earlier, compared to a decline of 4.1 percent in the first five months, the economists predicted. They expect retail sales of consumer goods to increase 0.2 percent in June from the same period last year, a big improvement from May’s 0.6 percent decline, and industrial added value to expand 4.5 percent in the period, remaining stable from the previous month.

Fixed asset investment remains weak, as shown by the fact that the construction purchasing managers’ index was still below the critical line and that real estate sales and property developer financing continued to decline, said Xie Yaxuan, chief economist at China Merchants Securities. Private investment confidence is also relatively weak.

However, given the sustained funding support for project investment from local government bonds and ultra-long-term special treasury bonds, the likelihood that the decline in fixed asset investment would rapidly expand is not high, Xie added.

Due to a relatively low base in the same period last year, retail sales of consumer goods are expected to return to growth in June, said Lu Zhengwei, chief economist at Industrial Bank. There is hope for an improvement in consumption in both the catering and durable goods sectors to some extent, he noted.

The industrial added value was influenced by several factors in June, according to Zhao Wei, chief economist at Shenwan Hongyuan Securities. Even though oil prices have largely fallen back, the overall operating rate of the petrochemical industry chain remains at historically low levels, reflecting the continued impact of high oil prices on industrial enterprises.

On the other hand, benefiting from strong domestic and overseas demand driven by AI technology, production in both the metallurgical and consumer industry chains improved in June, Zhao pointed out.

Editors: Tang Shihua, Futura Costaglione