Growth slowed by property headwinds

China's GDP growth pace hit 7.5 percent in the second quarter, accelerating slightly from the 7.4 percent rate notched during the first three months, official data revealed last week. This rebound is partially a result of "mini stimulus" measures deployed by the central government. Still, the economy can expect broad downward pressure from the cooling property market.

Fixed-asset investment has always played a leading role in driving Chinese economic growth. But during the first half, investment in property development contracted from a year earlier. The continuation of this trend will have a huge impact on an array of enterprises, including cement makers, steel producers and machinery manufacturers.

By floor area, residential home sales also declined by 6 percent year-on-year in the first half. This slump will not only dampen enthusiasm to start new projects, it will also cut into business for home decorating and furnishing companies as well.

Of course, local governments can expect their share of misery as land transfer demand weakens. Several localities have already eased earlier policy restrictions on the housing market, moves which many see as an acknowledgement of the hard fiscal times that lie ahead.