China’s economy grew at its slowest pace in at least a decade in the first quarter, but stronger industrial activity added to tentative signs the slump might be bottoming out amid huge stimulus spending.
The world’s third-largest economy grew by 6.1 percent from a year earlier as the global crisis battered trade, down from 6.8 percent in the previous quarter, the government reported yesterday.
Overall growth “is below expectations but positive signs are emerging that the economy possibly is bottoming out,” Credit Suisse economist Dong Tao (陶冬) said.
Industrial output surged 8.3 percent last month from a year earlier, up from 3.8 percent growth in the first two months of the year, said Li Xiaochao (李曉超), a spokesman for the National Bureau of Statistics. Investment in factories and other fixed assets soared 28.6 percent from a year earlier.
Quarterly growth appeared to be the lowest in at least a decade, though China has repeatedly revised its historical data, making comparisons difficult. Analysts said the 6.8 percent growth in the previous quarter was the lowest since 2001 and possibly earlier.
Beijing worries that rising job losses because of the crisis will fuel unrest and its priority is creating jobs for millions of unemployed people. Some analysts say 8 percent growth — China’s official target for this year — is the minimum needed to create enough employment. But others say the government should focus on job creation, not overall growth, because stimulus spending might inflate growth numbers without adding enough jobs.
Other areas have shown tentative improvements, with auto sales hitting a monthly high last month. But Premier Wen Jiabao (溫家寶), China’s top economic official, has cautioned that a possible rebound is fragile and called for vigilance and more efforts to boost growth.
The World Bank and some economists see a Chinese recovery starting this year but say that will depend partly on whether demand in the US and other Western markets recovers. The World Bank is forecasting Chinese growth of 6.5 percent this year.
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