By Kim Da-ye

With two economic superpowers, the United STates and Europe, in trouble, China has been the world economy’s last hope.
Next week, two important indicators will help investors judge if they can rely on China.

The Asian economic giant will announce its consumer price index for June at 10:30 a.m. on July 9th (KST) and the real gross domestic product (GDP) at 11 a.m. on the 13th.

According to economic information provider Econoday, China’s inflation in June is expected to slow down to 2.3 percent from 3 percent the previous month.

Stabilizing prices are good for the Chinese government, which will have more monetary policy options focused on economic growth.
The GDP growth rate for the second quarter, however, is expected to fall to 7.6 percent from 8.1 percent in the first quarter.

China’s economy is expected to grow at the slower pace in the second quarter than the rest of 2012, market observers say.

“The Shanghai Stock Exchange Composite Index fell 6.2 percent through June, going back to the level seen at the beginning of the year. The major causes were concerns that the Chinese economy is yet to hit bottom and that the second quarter’s GDP will be well below expectations,” the emerging market team of Korea Investment & Securities said in a recent report.

Aside from these two figures, China will release various economic indicators next week including the trade balance, new yuan loans, industrial production and retails sales, all for June.

In Korea, the monetary policy committee of the Bank of Korea (BOK) will meet Thursday and decide the key interest rate, which has been frozen at 3.25 percent since June 2011.

Market observers say that a rate cut is more likely than before, citing that inflation has slowed down and that BOK Governor Kim Choong-soo hinted in the June meeting a possibility of a rate cut in the case of a rapid slowdown of the economy.