China said yesterday its economy expanded by 9.2 percent last year, slowing from 2010, as global turbulence and efforts to tame high inflation put the brakes on growth.
However, the still healthy annual growth suggested that China’s economy would avoid a much-feared hard landing despite slumping demand from key export markets in the US and Europe, analysts said.
The figures, down from 10.4 percent growth in 2010, also meant China’s central bank was less likely to ease credit in the short-term to spur the world’s second-largest economy.
Photo: AFP
Beijing had set a growth target of around 8 percent for last year.
“This indicates our economy is still good and quite stable, and a soft landing for the economy is more possible. Therefore, the government is likely to postpone the next policy easing move,” Shanghai-based Shenyin Wanguo Securities (申銀萬國證券) economist Li Huiyong (李慧勇) said.
China’s GDP grew 8.9 percent in the fourth quarter, the National Bureau of Statistics said, slower than in the third quarter, but still exceeding analyst expectations.
“It’s slowing, even though it’s not particularly aggressive. The economy seems to be surprisingly resilient so far,” Hong Kong-based Standard Chartered Bank regional head of research for Greater China Stephen Green said.
Output from the country’s millions of factories and workshops rose 13.9 percent for all of last year, a slower pace than in 2010, as manufacturers faced reduced demand from key export markets.
Urban fixed asset investment — a measure of government spending on infrastructure — rose at a slightly slower pace of 23.8 percent last year as Beijing retreated from stimulus measures.
And retail sales, a key indicator of consumer spending, rose 17.1 percent last year, slightly slower than in 2010. The government wants domestic consumption to play a greater role in economic growth.
Chinese National Bureau of Statistics Commissioner Ma Jiantang (馬建堂) said that China could face a tough year ahead in light of Europe’s sovereign debt crisis.
“We must say that 2012 will be a year of complexity and challenges,” he told a news conference. “Given the turbulence in international financial markets and more serious protectionism in various forms, we’re going to face serious challenges.”
China’s trade surplus shrank to US$155.14 billion last year as export growth slowed sharply, reflecting the economic turmoil in Europe and the US, according to previously released data.
Most economists are predicting GDP growth of between 8 percent and 8.5 percent this year. China will unveil its economic growth target at the annual session of the legislature in March.
“The slowdown that’s been under way for some time continues to be the trend, but it’s a slowdown to a rate that’s still pretty healthy ... and a rate which the Chinese government seems comfortable with,” CLSA China macro-strategist Andy Rothman said.
Year-on-year growth in China has slowed for four straight quarters as Beijing — anxious about soaring costs — had restricted lending and hiked interest rates, while US and European demand for Chinese-made products has also weakened.
Some analysts had expected the government to move again to loosen credit as early as this month, but stronger-than-expected growth in the fourth quarter could give policymakers breathing room, analysts said.
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