PREVIEW-China July data to show signs of growth stabilising
* Industrial output seen up 9.0 pct in July vs June's 8.9 pct
* July retail sales seen up 13.5 pct vs 13.3 pct in June
* Jan-July investment seen up 20 pct vs 20.1 pct in H1
* Exports seen +3 pct in July vs -3.1 pct in June
* Imports seen +2.1 pct in July vs -0.7 pct in June
BEIJING, Aug 6 (Reuters) - China's exports, factory output and retail sales may have all edged up in July, a Reuters poll showed, showing initial signs of stabilisation in the economy as the government takes targeted steps to head off a sharper slowdown.
The Reuters poll of 26 economists showed consumer inflation likely quickened to a five-month high in July, indicating limited room for the central bank to loosen policy to support the economy, which has slowed in nine of the past 10 quarters.
While keeping the door shut for big stimulus, the government has unveiled polices to boost spending in social housing, urban infrastructure, high-speed rail and energy-saving industries, and tax breaks for small firms.
Chinese leaders have expressed confidence in meeting the full-year 7.5 percent GDP growth target, after annual growth slowed to 7.5 percent in the second quarter from 7.7 percent in the previous quarter.
Beijing has shown a greater tolerance for slower growth, putting more emphasis on long-term reforms to put the world's second-largest economy on a more sustainable footing.
"We expect the upcoming July data to show that economic activities remained lukewarm, with both export and domestic demand stabilising," Tao Wang, China economist at USB in Hong Kong, said in a research note.
The median forecast showed China's industrial output may have grown 9 percent in July from a year earlier, picking up from June's 8.9 percent growth rate.
A pair of manufacturing surveys released last week suggested big factories are faring better than their smaller peers, which are mired in their worst slowdown in 11 months.
Fixed-asset investment, a key driver of the economy, likely rose 20 percent in the first seven months of 2013 from a year earlier, versus the 20.1 percent rise in the first six months. The government only issues cumulative figures on investment.
Annual growth in retail sales is forecast to edge up to 13.5 percent in July from June's 13.3 percent, a six-month high but below last year's annual expansion of 14.3 percent.
Exports in July are forecast to have climbed 3 percent from a year earlier, swinging back from a 3.1 percent drop in June. Imports are expected to have risen 2.1 percent in July, following a 0.7 percent fall in June.
That could produce a monthly trade surplus of $27.2 billion.
Still, the external picture remains cloudy as the U.S. economic recovery has been patchy while much of Europe is still mired in recession.
Analysts in a Reuters poll forecast annual GDP growth will slow to 7.4 percent in the third quarter from 7.5 percent in the second. Full-year growth is forecast to be 7.5 percent - in line with the official target.
They also expect China's central bank will hold interest rates and the reserve requirement ratio (RRR) unchanged for the next 18 months, according to the poll published on July 18.
Trade data will be released on Thursday, and inflation, output, urban investment and retail sales on Friday. Loan growth and money supply figures could be released any time between Aug 8-15.
For a table with more detailed poll results
TIGHTER CREDIT CONDITIONS
Annual consumer inflation is forecast to quicken to 2.8 percent in July - a five-month high - from 2.7 percent in June, limiting the room for the central bank to loosen policy.
Producer prices are expected to have fallen for the 17th consecutive month in July from a year earlier, though the pace of decline is expected to moderate to 2.2 percent from June's 2.7 percent.
The central bank has pledged to keep policy steady with timely fine-tuning, but analysts warn credit conditions may get tighter in the coming months following a cash crunch in late June, as regulators seek to tap the brakes on the shadow banking sector.
The government is seeking to deal with the lingering hangover of a 4 trillion yuan ($652 billion) stimulus package implemented in 2008-2009, which resulted in piles of local government debt.
Factory overcapacity is another area that the government is trying to tackle, exacerbating the economic slowdown.
New bank loans are expected to fall to 665 billion yuan in July from June's 860.5 billion yuan, the poll showed.
Growth of M2 money supply is expected to have inched up to 14.1 percent from 14 percent in June. That would be higher than central bank's full-year target of 13 percent.
"The central bank will be cautious in cutting interest rates as it worries about a rebound in inflation and housing prices and risks in local government financing vehicles," economists at the Bank of Communications said in a research note. ($1 = 6.1247 Chinese yuan)
(Reporting by Kevin Yao; Editing by Kim Coghill)