January 17th, 2012
Econontersect: China’s growth slowed last year, if you want to call 9.2% gain slow. It was down from 10.3% for 2010. China’s GDP was 47.16 trillion yuan ($7.47 trillion) for the world’s second largest economy, slightly under 50% of the $15.3 trillion estimated for the U.S. The fourth quarter was the weakest in two years at 8.9% annual rate of growth. Shanghai Daily said that the fourth quarter was stronger than the consensus of estimates by economists which was 8.5%. The GDP numbers came down gradually and smoothly from 9.7% in Q1 2011 to the fourth quarter estimate just announced as the People’s Bank of China and the government tightened monetary policy to rein in inflation.
With inflation now down to 4.1% annual rate in December from 6.5% in the middle of the summer, the Financial Times says the gradual slowdown led most analysts to conclude that Beijing has managed to engineer a “soft landing”. Inflation is now running close to the government's 4.0% target.
However, the Financial Times lists a number of ongoing concerns for 2012 (most are reported at GEI News):
- Exports to China’s largest markets, the U.S. and Europe are slowing.
- Imports (mostly raw materials) are also slowing raising concerns about future production.
- Manufacturing has been contracting for three months.
- The real estate market has started a downturn.
The Financial Times quotes a number of sources that predict China will see further slowing of GDP growth in 2012 with growth in the 7-8% range mentioned.