China's big quarter: 10.7% growth
By Wang Yanlin |
January 22, 2010, Friday
|
Print Edition
Print Edition
CHINA'S economy grew 10.7 percent in the fourth quarter of 2009 from a year earlier, the National Bureau of Statistics said yesterday - the fastest pace since 2007.
The performance brought the country's 2009 gross domestic product to 33.5 trillion yuan (US$4.9 trillion).
That put China's annual GDP growth at 8.7 percent and narrowed the distance with Japan, the world's second largest economy, which is forecast by the International Monetary Fund to have an output of US$5.1 billion in 2009.
"China has staged a clear V-shaped recovery," said Ma Jiantang, head of the statistics bureau, at a press conference in Beijing. "China has walked out of the uncertainties battering the country in the early months of last year and is now confident about its growth momentum."
China's industrial output expanded 11 percent year on year in 2009. Fixed-asset investment jumped 30.1 percent to 22.5 trillion yuan. And retail sales advanced 15.5 percent to 12.5 trillion yuan.
China overtook Germany as the world's largest exporter last year, despite overseas shipments in 2009 dropping 16 percent.
But last year's strong performance has fueled expectations of a tightening policy stance, and the benchmark Shanghai Composite Index edged up only 0.22 percent yesterday, after plunging 2.93 percent on Wednesday.
"Good news from GDP may not be that good to markets, as people may expect faster exits of stimulus measures," said Lu Ting, a Merrill Lynch economist. "Meanwhile, higher inflation numbers will likely make inflation-hedging investment strategy a fashion on the street."
China's Consumer Price Index, the main gauge of price fluctuations, last month rose 1.9 percent from a year earlier, accelerating quickly compared with a 0.6 percent gain in November, when the index posted its first rise in nine straight months.
The Producer Price Index, the factory-gate yardstick of inflation, also ended a 12-month losing streak in December by increasing 1.7 percent from a year earlier.
The expectation for growing inflationary pressure has prompted forecasts of an increase of interest rate. The guesswork seemed to gain ground after the central bank raised interest rates on its central bank bills twice last week and asked banks to put aside more money as reserves; both are signs of tightening polices and harbingers of a rise in benchmark interest rates.
Ma did not respond directly to whether China would soon have an interest rate increase. He said the decision is up to the central bank and China will stick to a relatively proactive fiscal policy and a relatively easy monetary policy.
Wang Tao, head of China Economic Research at UBS, said in an interview on Monday that China's tightening policies are apparent.
"But it is by no means a tight policy stance," Wang said. "China needs to continue its stimulus package and keep liquidity ample on the market to sustain its growth."
China should properly manage inflationary expectation, contain the trend of overcapacity and prevent rapid increases in asset prices, Ma said when listing them as major challenges for China this year. China has set a growth target of 8 percent for this year.
The performance brought the country's 2009 gross domestic product to 33.5 trillion yuan (US$4.9 trillion).
That put China's annual GDP growth at 8.7 percent and narrowed the distance with Japan, the world's second largest economy, which is forecast by the International Monetary Fund to have an output of US$5.1 billion in 2009.
"China has staged a clear V-shaped recovery," said Ma Jiantang, head of the statistics bureau, at a press conference in Beijing. "China has walked out of the uncertainties battering the country in the early months of last year and is now confident about its growth momentum."
China's industrial output expanded 11 percent year on year in 2009. Fixed-asset investment jumped 30.1 percent to 22.5 trillion yuan. And retail sales advanced 15.5 percent to 12.5 trillion yuan.
China overtook Germany as the world's largest exporter last year, despite overseas shipments in 2009 dropping 16 percent.
But last year's strong performance has fueled expectations of a tightening policy stance, and the benchmark Shanghai Composite Index edged up only 0.22 percent yesterday, after plunging 2.93 percent on Wednesday.
"Good news from GDP may not be that good to markets, as people may expect faster exits of stimulus measures," said Lu Ting, a Merrill Lynch economist. "Meanwhile, higher inflation numbers will likely make inflation-hedging investment strategy a fashion on the street."
China's Consumer Price Index, the main gauge of price fluctuations, last month rose 1.9 percent from a year earlier, accelerating quickly compared with a 0.6 percent gain in November, when the index posted its first rise in nine straight months.
The Producer Price Index, the factory-gate yardstick of inflation, also ended a 12-month losing streak in December by increasing 1.7 percent from a year earlier.
The expectation for growing inflationary pressure has prompted forecasts of an increase of interest rate. The guesswork seemed to gain ground after the central bank raised interest rates on its central bank bills twice last week and asked banks to put aside more money as reserves; both are signs of tightening polices and harbingers of a rise in benchmark interest rates.
Ma did not respond directly to whether China would soon have an interest rate increase. He said the decision is up to the central bank and China will stick to a relatively proactive fiscal policy and a relatively easy monetary policy.
Wang Tao, head of China Economic Research at UBS, said in an interview on Monday that China's tightening policies are apparent.
"But it is by no means a tight policy stance," Wang said. "China needs to continue its stimulus package and keep liquidity ample on the market to sustain its growth."
China should properly manage inflationary expectation, contain the trend of overcapacity and prevent rapid increases in asset prices, Ma said when listing them as major challenges for China this year. China has set a growth target of 8 percent for this year.
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