* China economy seen growing 6.6 pct y/y in Q3, vs 6.7 pct in Q2
* More stimulus expected as growth may hit weakest since Q1 2009
* Full-impact of trade spat with U.S. has yet to be felt
* Q3 GDP, Sept activity data due Oct 19 at 0200 GMT
By Kevin Yao
BEIJING, Oct 19 (Reuters) - China’s third-quarter GDP data on Friday is expected to show growth slipped to its weakest pace since the global financial crisis, as domestic demand faltered and exporters started to feel the pinch from a bitter Sino-U.S. trade dispute.
In a warning this week, Chinese Premier Li Keqiang said the Asian economic powerhouse faces increasing downward pressure, and pledged the government will take targeted measures to prevent large fluctuations in growth.
A Reuters poll of analysts underscored the dimming outlook for the world’s second biggest economy, with forecasts centering on growth at 6.6 percent in the June-Sept quarter from a year earlier - the weakest pace since the first quarter of 2009
The predicted third-quarter growth compared with 6.7 percent rate in the previous quarter but would still be higher than the government’s full-year target of around 6.5 percent.
China is locked in a trade war with the United States, with Washington threatening to escalate the confrontation after imposing tariffs on $250 billion of Chinese goods.
Faced with increasing headwinds to growth, policymakers are expected to step up stimulus in coming months. While a years-long de-risking campaign has driven up borrowing costs and weighed on activity, authorities are now trying to mitigate the broader economic impact of higher U.S. trade tariffs.
Some export-driven Chinese cities and regions, such as the southern Guangdong province, have already felt the pinch from the dispute, rushing to reduce the impact by unleashing a flurry of measures and incentives to help struggling exporters.
Policymakers have in recent months unveiled measures to lower financing costs, cut taxes and fast-track more infrastructure projects, although analysts believe more stimulus measures are needed to put a floor under the slowing economy.
Central bank governor Yi Gang said on Sunday he still sees plenty of room for adjustment in interest rates and the reserve requirement ratio (RRR).
The central bank has cut reserve requirements for lenders four time this year, with the latest cut taking effect on Oct. 15, injecting more liquidity to stimulate bank lending. But the central bank faces obstacles in funneling more credit to cash-strapped small businesses, which are vital for boosting economic growth and creating jobs.
Chinese leaders have ruled out strong stimulus that could worsen the country’s debt problems - a legacy of a massive lending spree to shield the economy from the global financial crisis.
But there are few signs of mass unemployment, unlike in 2008-09 when a sudden slump in global demand threw about 20 million migrant workers out of jobs.
China releases second quarter GDP on Friday, along with September industrial output, retail sales, property sales and investment, and fixed asset investment data. (Reporting by Kevin Yao Editing by Shri Navaratnam)