Industryweek 4153 China Flag Promo

China Growth Slows to 7.7% in Q1

April 15, 2013
Industrial production rose 8.9% year-on-year in March and 9.5% in the first quarter.

BEIJING -- Fuelling fears a recent pick-up in the world's number-two economy is faltering on weak overseas demand, growth in China slowed to 7.7% in the first quarter, data showed Monday.

The figure for January-March from the National Bureau of Statistics (NBS) marked a slowdown from 7.9% in the previous quarter.

Observers have expressed optimism China's economy will be a driver of a global recovery and the pick-up at the end of last year -- which snapped seven straight quarters of slowing -- reinforced those hopes.

The NBS cited "the complicated and volatile economic environment at home and abroad," adding that China's government  is  committed to "making progress while ensuring stability."

NBS spokesman Sheng Laiyun  said the global economy saw "profound adjustment" in the first quarter of 2013, blaming aggressive monetary easing policies overseas for strengthening China's yuan currency and hitting exports.

"The recovery has been slow, in particular some developed countries have carried out quantitative easing policies," he said.

"This has created bigger pressure for the appreciation of currencies in developing countries and this has made it more difficult to increase exports."

Sheng did not name any countries but central banks in the United States and Japan have unveiled measures to support their economies with aggressive monetary easing.

China's economy grew 7.8% in 2012, its slowest rate in 13 years, and authorities have kept their growth target for this year at a conservative 7.5%.

Monday's figures followed statistics last week showing China recorded a trade deficit of $880 million in March owing to softening demand in key U.S. and European markets, while below-forecast inflation pointed to weakness at home.

Policymakers have vowed to rebalance the economy away from a reliance on the traditional growth drivers of investment and exports, and towards consumer demand.

Fixed-asset investment, a key measure of government spending on infrastructure, jumped 20.9% year on year in the first quarter, the NBS said. But compared with the 21.2% growth for the first two months of the year, the cumulative data for the first quarter indicate the pace is slowing.

Industrial production rose 8.9% year-on-year in March and 9.5% in the first quarter, the NBS added, while retail sales were up 12.6% in the month and 12.4% in the quarter.

Industrial production growth had suffered a "sudden deceleration," IHS Global Insight

The GDP figures came after Chinese President Xi Jinping last week expressed confidence in the economy, telling business leaders it was in "good shape." He said China will probably not be able to sustain the "ultra-high speed of economic growth" of the past, but that a "relatively high speed of economic growth" will be possible.

-Fran Wang, AFP

Copyright Agence France-Presse, 2013

Popular Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!