China growth likely to fall

China’s richest man Zong Qinghou said the nation’s growth will slide further in the second half of the year and proposed cutting taxes and breaking up monopolies to drive an economic recovery.

“People will only invest if there is prospect of making a profit,” Zong said in an interview in Beijing. “Medium and small companies are not willing to take loans. If they can’t make a profit, why bother taking a loan?”

The government’s pledge to limit additional stimulus is adding to the risk of a deeper slowdown in an economy jolted by a cash crunch and weakened by faltering global demand for exports. China’s economy grew 7.5 per cent in the second quarter from a year earlier, slowing for a second straight period.

“Economic growth will slow down again in the second half because there have been no major economic policies rolling out,” he said.

Zong’s prescription for driving a Chinese recovery is in line with Premier Li Keqiang’s call for a reduced role for the state in the economy, with the billionaire urging the breaking up of monopolies and easier administrative approvals from the government.