China's annual economic growth could fall below 7 per cent in the second quarter if weak activity persists in June, an influential government adviser said today.

The forecast by Zheng Xinli, a former deputy director of the Chinese communist party's policy research office, is among the most bearish by any government and private sector economists.

"GDP growth in the second quarter could fall below 7 per cent if there is no significant improvements in economic data for June," the overseas edition of the People's Daily quoted Zheng Xinli, now deputy head of the China Centre for International Economic Exchanges (CCIEE), a top government think-tank, as saying.

China's industrial output growth usually outpaces GDP growth by 3-5 percentage points, the newspaper cited Mr Xinli as saying.

China's industrial output rose 9.6 per cent in May from a year earlier, picking up slightly from a three-year low of 9.3 per cent stuck in April.

The same newspaper article quoted Jia Kang, head the finance ministry's think-tank, as predicting China's economic growth could bottom out in the second quarter.

"If everything goes smoothly, economic growth could hit a trough in the second quarter and, if the situation is worse, that may happen in the third quarter," Mr Kang was quoted as saying.

The government is due to publish second-half economic indicators in mid-July.

The government has been stepping up policy steps to combat the slowdown, cutting interest rates last week for the first time since the depths of 2008/09 global crisis while fast tracking infrastructure and industrial investment projects.

But the government cannot make a fundamental policy shift and relax its curbs on the property sector, although it needs to step up policy fine-tuning to support the economy, Mr Kang said.

Reuters