GOLDMAN Sachs has lowered earnings growth forecasts for China’s companies and Credit Suisse has cut stock index targets as China’s economy slows.

Profits for companies in the MSCI China Index might rise 1.8 percent this year and 8.6 percent in 2013, compared with previous estimates of 6 percent and 12.3 percent, Goldman Sachs analysts Helen Zhu and Timothy Moe wrote in a report.

Credit Suisse lowered its 12-month target for the index to 60 from 70, analysts Vincent Chan and Peggy Chan said in a report.

Third-quarter “earnings growth may not yet show a clear inflection point,” Goldman Sachs’ Zhu and Moe wrote.

“We expect further earnings cuts — albeit at a slower rate, as current revision sentiment is very weak already.”

The Shanghai Composite Index has retreated on concern two reductions in borrowing costs and bank reserve ratios this year will fail to halt a decline in economic growth.

China’s economy grew 7.6 percent in the second quarter, the slowest pace since 2009, as Europe’s debt crisis hurt exports and a crackdown on property speculation dampened domestic demand.

Manufacturing shrank for the first time in nine months in August as new orders contracted and output rose at a slower pace.

Earnings per share for firms in the MSCI China Index of mainly Hong Kong-listed mainland firms rose 2 percent in the first half, slowing from 28 percent from a year ago, according to Goldman Sachs.

The economy risked missing the government’s 2012 growth target of 7.5 percent, according to Lu Ting, head of China economics at Bank of America Merrill Lynch.

Credit Suisse lowered its target for the Hang Seng gauge to 12,000 points from 13,000, based on an assumption of “flat” earnings in the next three years. (SD-Agencies)