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Bloomberg reported that a Chinese central bank adviser has predicted the nation’s expansion may cool to 7.4% this quarter. Mr Song Guoqing, an academic member of the People’s Bank of China monetary policy committee, also warned that a decline in producer prices in tandem with consumer inflation may hurt investment returns of industrial companies, damping their desire to expand. Mr Song said at a forum in Beijing on July 21 that “The consensus is that China’s economic growth rate will be close to 8% in coming months, but I personally am more pessimistic because there are problems on the export side. With Europe’s debt crisis still unfolding, there is a risk of insufficient government measures if Chinese exports fall more sharply than expected in coming months.” He added “The government will be prudent” with any stimulus. Prudence can be good as it can avoid big swings. But in an economic slowdown it may also lead to insufficient measures.” Mr Song, who studied economics at the University of Chicago from 1991 to 1995, was appointed one of three academic advisers to the central bank in March when the two year term of his predecessors ended. He was a “special consultant” to Goldman Sachs Group Inc’s China venture, Gaohua Securities Co, from 2007 until he took up his position with the PBOC. He spoke at a forum held by Peking University’s China Center for Economic Research where he is a professor specializing in China’s economy and inflation. China’s economic growth slowed to 7.6% in the three months ended June, the sixth straight deceleration, as Europe’s fiscal crisis sapped exports and a crackdown on property speculation curbed domestic demand.