China's growth hits 3-year low in Q2, but still 'stable'
By Wang Yanlin |
July 14, 2012, Saturday
|
Print Edition
Print Edition
CHINA'S economic growth fell below 8 percent for the first time in three years in the second quarter, but it remained relatively stable compared with growth rates in other countries, the National Bureau of Statistics said yesterday.
Gross domestic product expanded 7.6 percent from a year earlier in the April-June period, easing further from the 8.1 percent pace in the first quarter.
The overall economic output in the world's second-largest economy grew to 22.7 trillion yuan (US$3.6 trillion) in the first half, up 7.8 percent year on year.
Bureau spokesman Sheng Laiyun said the slowdown is tolerable given worsening global conditions and insufficient domestic demand. The growth rate is still higher than this year's target of 7.5 percent, he said. "China's economic performance remains stable," Sheng said. "Globally, we have achieved a relatively good result despite the slowdown."
Among the emerging markets, India reported an economic growth rate of around 5 percent in the second quarter, Brazil delivered a 1.2 percent increase, while South Africa was similarly weak, Sheng said.
Growth in developed countries was worse. The eurozone's economy was likely to contract 0.3 percent in the second quarter, and the United States was also growing at a slower pace of about 1.6 percent during the period.
Zhou Hao, an economist at Australia and New Zealand Banking Group Ltd, said the second-quarter GDP data suggest that China's slowdown was more severe than expected. "But we think a rebound is underway," Zhou said. "The cyclical rebound will be a moderate one because of the lack of policy conviction and the still uncertain global outlook."
Some economists feared that China is en route to a prolonged downturn and urged more stimulus measures when the inflation eased to a 29-month low of 2.2 percent in June.
"Despite initial signs of earlier easing measures starting to work, downside pressure on growth remains," said Qu Hongbin, chief economist for China at HSBC. "This will encourage policy-makers to step up easing."
The Asian Development Bank on Thursday slashed its estimate of China's 2012 growth to 8.2 percent from an 8.5 percent forecast made in April, citing weak performance in Europe and the US.
But Sheng said China's economy has shown signs of stabilization in June and it will stick to proactive fiscal policies and prudent monetary policies. Growth would be put in "a more prominent position" among the government priorities, Sheng said.
China is taking a cautious approach to stimulus measures, mindful of the painful hangover of inflation and debt from its 4 trillion yuan stimulus in 2008.
Last week, interest rates were cut for the second time in one month to lower borrowing costs for business and investment in the latest move to spur growth.
Before that, China had reduced reserve requirements, expanded investment channels for private funds, and accelerated tax reforms to stimulate the economy.
According to the bureau, China's manufacturing sector expanded 8.3 percent on an annual basis to 11.1 trillion yuan in the first half, while the service sector advanced 7.7 percent to 9.86 trillion yuan. The agricultural industry edged up 4.3 percent to 1.74 trillion yuan.
Industrial output grew 10.5 percent in the January-June period, slower from 11.6 percent in the first three months.
Disposable income of urban residents rose 13.3 percent to 12,509 yuan in the six months, while rural people's proceeds rose to 4,303 yuan, up 16.1 percent.
Gross domestic product expanded 7.6 percent from a year earlier in the April-June period, easing further from the 8.1 percent pace in the first quarter.
The overall economic output in the world's second-largest economy grew to 22.7 trillion yuan (US$3.6 trillion) in the first half, up 7.8 percent year on year.
Bureau spokesman Sheng Laiyun said the slowdown is tolerable given worsening global conditions and insufficient domestic demand. The growth rate is still higher than this year's target of 7.5 percent, he said. "China's economic performance remains stable," Sheng said. "Globally, we have achieved a relatively good result despite the slowdown."
Among the emerging markets, India reported an economic growth rate of around 5 percent in the second quarter, Brazil delivered a 1.2 percent increase, while South Africa was similarly weak, Sheng said.
Growth in developed countries was worse. The eurozone's economy was likely to contract 0.3 percent in the second quarter, and the United States was also growing at a slower pace of about 1.6 percent during the period.
Zhou Hao, an economist at Australia and New Zealand Banking Group Ltd, said the second-quarter GDP data suggest that China's slowdown was more severe than expected. "But we think a rebound is underway," Zhou said. "The cyclical rebound will be a moderate one because of the lack of policy conviction and the still uncertain global outlook."
Some economists feared that China is en route to a prolonged downturn and urged more stimulus measures when the inflation eased to a 29-month low of 2.2 percent in June.
"Despite initial signs of earlier easing measures starting to work, downside pressure on growth remains," said Qu Hongbin, chief economist for China at HSBC. "This will encourage policy-makers to step up easing."
The Asian Development Bank on Thursday slashed its estimate of China's 2012 growth to 8.2 percent from an 8.5 percent forecast made in April, citing weak performance in Europe and the US.
But Sheng said China's economy has shown signs of stabilization in June and it will stick to proactive fiscal policies and prudent monetary policies. Growth would be put in "a more prominent position" among the government priorities, Sheng said.
China is taking a cautious approach to stimulus measures, mindful of the painful hangover of inflation and debt from its 4 trillion yuan stimulus in 2008.
Last week, interest rates were cut for the second time in one month to lower borrowing costs for business and investment in the latest move to spur growth.
Before that, China had reduced reserve requirements, expanded investment channels for private funds, and accelerated tax reforms to stimulate the economy.
According to the bureau, China's manufacturing sector expanded 8.3 percent on an annual basis to 11.1 trillion yuan in the first half, while the service sector advanced 7.7 percent to 9.86 trillion yuan. The agricultural industry edged up 4.3 percent to 1.74 trillion yuan.
Industrial output grew 10.5 percent in the January-June period, slower from 11.6 percent in the first three months.
Disposable income of urban residents rose 13.3 percent to 12,509 yuan in the six months, while rural people's proceeds rose to 4,303 yuan, up 16.1 percent.
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