China says economic growth slowest in 10 years

Wednesday, April 15, 2009 at 10:26 PM Posted by Beijing News


China announced its slowest economic growth in at least a decade on Thursday, with the worldwide downturn cooling expansion to just 6.1 percent in the first quarter of the year.

After seeing 6.8 percent growth in the fourth quarter of 2008, the figure underlined the impact the global crisis is having on China's export-dependent economy, which in recent years has been used to double-digit expansion.

"The national economy is confronted with the pressure of a slowdown," Li Xiaochao, spokesman for the National Bureau of Statistics, told reporters.

He said problems faced by the world's third-largest economy included a decline in exports, a drop in corporate profits and unemployment.

The figure follows nine percent growth for all of 2008, and comes amid concerns that China this year will experience its slowest economic expansion in 19 years.

Before the global economic crisis struck, China had experienced double-digit growth from 2003 to 2007.

"The quarterly growth was the slowest in the past 10 years as the global financial crisis continued to affect the world's fastest-growing economy," the official Xinhua news agency reported.

Historical data from Beijing statistical authorities is patchy, but Goldman Sachs said growth in the first quarter was the slowest since data began being recorded in 1992.

Worldwide economic woes have left China, which last year worried that inflation might be too high, facing deflation.

The consumer price index CPI, which measures the cost of living and is China's main gauge of inflation, fell 0.6 percent in the first quarter of 2009 from a year earlier, according to the bureau.

In March the CPI was down 1.2 percent from a year ago. Compared with February it fell 0.3 percent, the bureau said.

The CPI grew 5.9 percent in 2008 but has weakened significantly in recent months.

Urban fixed asset investments rose 28.6 percent in the first quarter, while in March alone the increase was 30.3 percent year-on-year, the bureau said.

The figure is a measure of government spending on infrastructure, which got a huge boost in November with a four-trillion-yuan 580-billion-dollar package aimed at warding off the effects of the global economic crisis.

"It looks like we've already started to gain some forward momentum," said Stephen Green, a China economist with Standard Chartered.

He said the government-funded stimulus was likely to result in at least another two quarters of strong investment growth.

"The key is whether the consumer keeps spending and whether the private sector starts to invest," said Green.

China's industrial output, which illustrates activity in the nation's millions of factories and workshops, rose 12.9 percent in 2008.





A view of a mosque in Cairo during sunset. REUTERS/Tarek Mostafa

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