China seeing a controlled softening rather than a hard landing for is economy and US Treasury Secretary says US GDP growth could stay at 2% per year for slower growth new normal

The mainland economy may bottom out over next few months, thanks to Beijing's fine-tuning policy, as industrial production and consumption gathered steam last month and accelerated investment in infrastructure offset a deeper slide in the property market.

Economists expect Beijing to roll out more mini-stimulus measures, on the top of the recent moderate easing of money supply, in a bid to hold economic growth above the central government's bottom line, which is believed to be somewhere below but close to the annual target of about 7.5 per cent.

Industrial production grew 8.8 per cent year on year last month, slightly faster than April's 8.7 per cent, the National Bureau of Statistics said yesterday. Power generation rose 5.9 per cent, accelerating from April's 4.4 per cent.

But the property market remained a major drag on economic recovery, with investment in the sector growing 14.7 per cent year on year in the first five months of the year, down from the 16.4 per cent growth between January and April.

Home sales value in the first five months dropped 10.2 per cent, while sales of office building units fell 14 per cent.

However, the weakness in the real estate sector was offset by strong infrastructure investment, which climbed 25 per cent in the first five months from a year earlier, accelerating from a 22.8 per cent increase from January to April.

Retail sales also posted stronger growth last month, up 12.5 per cent year on year compared with 11.9 per cent growth in April, driven by a surge in online sales, which soared 53.2 per cent.

Gerard Burg, a senior economist for Asia at National Australia Bank, said the mainland might see a "controlled softening" rather than a hard landing.

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