Preview - China July data to show broadly steady growth, further slowing in investment

By Elias Glenn

BEIJING (Reuters) - Skittish global investors may be reassured by fairly steady growth expected in a flurry of Chinese data in coming weeks, but

tepid demand, slowing investment and rising debt levels remain pressing concerns for the world's second-largest economy.

A surge in construction in recent months has kept steel mills and cement plants busier, alleviating some of the strains from chronic overcapacity that Beijing has promised to tackle.

But most economists note the pick-up has been highly reliant on government spending and a housing boom, and may only be temporary.

Mixed business surveys for July earlier this week showed activity was mostly steady but still sluggish, with some signs of strength among smaller manufacturers but continuing job losses.

Economists polled by Reuters expected July exports fell 3 percent from a year earlier, which would be an improvement from a 4.8 percent decline in June but still mark the 12th month in 13 of falling shipments. A weaker yuan seems to have done little for exporters in the face of stubbornly weak global demand.

Imports likely fell 7 percent, a slight improvement from June, while China's trade surplus is forecast to fall only marginally to $47.6 billion.

Inflation is expected to remain modest despite growing government fiscal stimulus, with consumer inflation dipping again to 1.8 percent and producer price declines moderating to 2 percent, easing strains on some companies' balance sheets.

Money and credit data may be more mixed, as the government looks to rein in dangerously high leverage and debt levels without jeopardizing growth.

New yuan loans in July likely fell to 800 billion yuan ($120.5 billion), which would be a three-month low, while growth in outstanding loans may have moderated to 13.8 percent, down from 14.3 percent growth in June.

M2 money supply is expected to have risen 11.2 percent in July, which would be the slowest since May 2015. It rose 11.8 percent in June.

New loans in China surged to a record high in the first half of the year as government spending coursed through the economy, but that new credit is generating less growth than before as China struggles with overcapacity and entrenched roadblocks to a more efficient and productive economy.

Concerns about debt and a buildup of cash on company balance sheets has led to speculation that further monetary easing will be limited, with the focus in the last five months of the year expected to be on structural reform and fiscal measures to boost growth.

Growth in industrial output and retail sales likely moderated slightly in July, the poll showed.

But urban fixed asset investment likely expanded 8.8 percent in Jan-July, a fresh 16-year low and cooling from 9.0 percent in Jan-June.

Economists are also expected to focus once again on private investment growth, which has cooled to record lows, leaving the economy more unbalanced.

Foreign exchange reserves likely fell to $3.20 trillion after unexpectedly rising in June due to a stronger yen.

China's reserves have stabilised in the last few months despite new downward pressure on the yuan, as analysts say the Chinese government has been relatively successful with measures to limit capital outflows.

Forex reserves data are expected to be released this weekend, with trade, inflation and loan figures out next week.

Industrial output, investment and retail sales will be released on Aug. 11.

($1 = 6.6387 Chinese yuan renminbi)

(Reporting by Elias Glenn and Shaloo Shrivastava; Editing by Kim Coghill)