GDP growth slowest since 2009
By Wang Yanlin |
January 18, 2012, Wednesday
|
Print Edition
Print Edition
China's economy grew 9.2 percent in 2011 from a year earlier, with its gross domestic product at 47.1 trillion yuan (US$7.5 trillion), the National Bureau of Statistics said yesterday.
The pace in the final quarter weakened to 8.9 percent - the slowest in two and a half years as a result of the eurozone crisis and China's fight against inflation.
Growth decelerated as the government raised interest rates and tightened investment curbs to prevent overheating and tame inflation. Lending was eased late in the year after US and European export demand plunged.
The slowdown was in line with government plans, said Ma Jiantang, head of the bureau. He said the "ideal situation" would be to keep growth between 8.5 percent and 9 percent, with inflation low.
This year, China faces "complexity and challenges" due to global malaise and pressure for prices to rise, Ma said. "A slower pace fits into China's broader plan to keep economic growth steady, and it is still faster than our target of 7 percent during the 12th Five-Year Plan."
China is one of the biggest importers and slower growth could have global repercussions if it cuts demand for iron ore, industrial components and other goods, The Associated Press reported.
Retail sales growth rebounded last month to 18.1 percent from November's 17.1 percent while factory output rose 12.8 percent, up from 12.4 percent.
"This all reaffirms our outlook on China for a soft landing," said Moody's Analytics economist Glenn Levine. "Export demand has cooled, but domestic demand is still running strong."
Qu Hongbin, chief economist for China at HSBC, said: "The rate in the fourth quarter was a touch higher than our expectation of 8.6 percent. "The slight upside surprise was boosted by a pick-up of December's industrial production and retail sales growth ahead of an early Chinese New Year."
Barclays Capital economist Huang Yiping said: "The better-than-expected GDP report for the fourth quarter confirmed that the economy has not slowed as much as the market expected. This should provide further support to the case for a soft landing of the Chinese economy in the coming quarters."
Huang said the government would probably retain its mix of "prudent monetary policy and proactive fiscal policy" while the central bank may further lower the amount of money banks must set aside as reserves.
Li Huiyong, an economist at Shenyin Wanguo Securities Co, said the final quarter figures indicated the economy was still good and quite stable.
"A soft landing for the economy is more possible," Li said. "Therefore, the government is likely to postpone the next policy easing move."
The Consumer Price Index, the main gauge of inflation, softened to a 15-month low of 4.1 percent in December, allowing more room for possible policy easing.
Investment and consumption contributed 54.2 percent and 51.6 percent to China's GDP growth in 2011, while net trade delivered a negative 5.8 percent, the bureau said.
The pace in the final quarter weakened to 8.9 percent - the slowest in two and a half years as a result of the eurozone crisis and China's fight against inflation.
Growth decelerated as the government raised interest rates and tightened investment curbs to prevent overheating and tame inflation. Lending was eased late in the year after US and European export demand plunged.
The slowdown was in line with government plans, said Ma Jiantang, head of the bureau. He said the "ideal situation" would be to keep growth between 8.5 percent and 9 percent, with inflation low.
This year, China faces "complexity and challenges" due to global malaise and pressure for prices to rise, Ma said. "A slower pace fits into China's broader plan to keep economic growth steady, and it is still faster than our target of 7 percent during the 12th Five-Year Plan."
China is one of the biggest importers and slower growth could have global repercussions if it cuts demand for iron ore, industrial components and other goods, The Associated Press reported.
Retail sales growth rebounded last month to 18.1 percent from November's 17.1 percent while factory output rose 12.8 percent, up from 12.4 percent.
"This all reaffirms our outlook on China for a soft landing," said Moody's Analytics economist Glenn Levine. "Export demand has cooled, but domestic demand is still running strong."
Qu Hongbin, chief economist for China at HSBC, said: "The rate in the fourth quarter was a touch higher than our expectation of 8.6 percent. "The slight upside surprise was boosted by a pick-up of December's industrial production and retail sales growth ahead of an early Chinese New Year."
Barclays Capital economist Huang Yiping said: "The better-than-expected GDP report for the fourth quarter confirmed that the economy has not slowed as much as the market expected. This should provide further support to the case for a soft landing of the Chinese economy in the coming quarters."
Huang said the government would probably retain its mix of "prudent monetary policy and proactive fiscal policy" while the central bank may further lower the amount of money banks must set aside as reserves.
Li Huiyong, an economist at Shenyin Wanguo Securities Co, said the final quarter figures indicated the economy was still good and quite stable.
"A soft landing for the economy is more possible," Li said. "Therefore, the government is likely to postpone the next policy easing move."
The Consumer Price Index, the main gauge of inflation, softened to a 15-month low of 4.1 percent in December, allowing more room for possible policy easing.
Investment and consumption contributed 54.2 percent and 51.6 percent to China's GDP growth in 2011, while net trade delivered a negative 5.8 percent, the bureau said.
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