EU predicts slowdown in China's growth to 7.4% in 2014

The European Union's Commission has reportedly lowered estimates for China's growth indicating a slowdown to 7.4 percent in 2014.

The EU stated that China is expected to grow at 7.5 percent in 2013, but the major risks for its economy remain domestic although China remains exposed to global currents.

According to China Daily, the EU said that there has been a rapid credit growth over recent years, while real activity has been on a declining trend, which means a growth of stress in the financial system of China.

The Commission further pointed that China is gradually shifting to 'a lower trend growth path', because of the fading of technological catch-up, falling returns on marginal investment and the onset of a decline in the overall labor force.

Meanwhile, IMF has also lowered estimates on the Chinese economy, while cautioning about the country's rising debt levels and a surge in credit.

The Commission said that China's slowing growth may have negative impacts on the EU's economy as it is a very important trade partner for most members of the state of the Union.

The report said that exports to China, Russia and Turkey represent 20 percent of the total for the EU and are equivalent to 2.3 percent of its GDP.