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Restructuring may hit short-term growth: AnalystsCHINA'S economy is slowing its pace as it enters the Year of the Horse, and there could be a bumpy ride ahead, say analysts.倉This is because Chinese leaders are expected to implement an ambitious masterplan that focuses on the quality - rather than speed - of growth.With the latest official manufacturing and services data signalling that the world's No.2 economy is already losing momentum, the key question now is by exactly how much growth could slacken this year.Clue-seeking analysts say they will be watching how aggressively President Xi Jinping will move on three key economic priorities for this year: Restructuring the economy to boost domestic consumption, reforms to boost the role of market forces and rein in state monopolies, and reducing China's debt levels.These areas are among the most urgent tasks needed to ensure China's growth moderates without a spike in financial risks, observed Fudan University professor Chen Xuebin.State Information Centre economist Niu Li added that they are also "crucial parts of the new reform agenda that the new Chinese leadership laid out during the third plenum".Reforms include shifting the economic structure away from state investment and exports towards domestic consumption, and rolling back state monopolies. Beijing also pledged to "control local government debt risk".Many of the plenum's reforms will likely impact growth negatively in the near term, JP Morgan economist Zhu Haibin observed in a note. He expects this year's growth to ease to 7.4 per cent - a level that matches the median forecast in a Reuters poll.This 7.4 per cent pace would be the lowest in 24 years.It would also be a further deceleration from last year's expected 7.6 per cent rate, the slowest in 14 years. Indeed, the economy is already losing steam, based on figures last month showing a drop in factory output to a six-month low, while a services index hit the lowest since September last year.Some forecasts are more upbeat though. China's top planning agency, for one, expects a recovery in overseas demand that could boost Chinese exports and hoist gross domestic product up to 8 per cent.Indeed, analysts expect export growth to pick up to as much as 15 per cent, from an estimated 8 per cent last year.On th24小時迷你倉 bearish side stands a major United States industry group, the Manufacturers Alliance for Productivity and Innovation. It warns of a sluggish world economy this year that could drag China's growth down to 7.1 per cent.But Beijing-based economist Li Shimin believes China's growth rate this year may depend less on the global economy than on how deftly Beijing rolls out policy changes to achieve its three key priorities.Some reforms - particularly in the financial sector like liberalising exchange rates and interest rates - are not only easier to roll out, but can also boost growth.But as JP Morgan's Mr Zhu pointed out, other changes can help create sustainable growth but have detrimental effects on short-term growth.These include "limiting the scale of government expenditure, reducing redundant capacity in state-owned enterprises and a more aggressive de-leveraging of the economy", he noted.Some analysts like Mr Peng Wensheng, chief economist of investment bank China International Capital Corp, have predicted that domestic consumption could be the key driver of growth this year. It could contribute 4.1 percentage points to this year's GDP growth rate, which Mr Peng predicted would reach 7.6 per cent.One area where Beijing is likely to take action is scaling back its reliance on bank credit to fuel growth. So, the property sector, a key growth pillar which became overheated as a result of Beijing's 10 trillion yuan (S$2.1 trillion) credit stimulus during the 2008 financial crisis, could be hurt.Beijing will also seek to constrain local government debt, which has surged some 70 per cent over the past three years to 17.9 trillion yuan.All eyes will be on China's growth target this year, which was set last month but will be unveiled only at annual parliamentary meetings in March.If Beijing lowers it to 7 per cent, down from the 7.5 per cent rate it has used since 2012, this would send a strong signal that it is willing to tolerate slower output to make room for reforms.Another sign of Beijing's commitment came on Monday, when it announced Mr Xi would lead a small group to guide the "comprehensive deepening of reforms".His appointment "could boost people's confidence in clearing vested interests and implementing reforms", Morgan Stanley analysts noted.graceng@sph.com.sg迷你倉旺角