Monday, April 15, 2013

First quarter: China growth slows down

China growth slows down

Economists are concerned about the speed recovery because of China's slow economic growth.

Gross domestic product grew 7.7% over the previous year during the first quarter, the National Bureau of Statistics reported Monday. That's slightly faster than the government's target of 7.5%, but well below the 8% expected by economists. Fourth quarter 2012 growth was 7.9%.

Separate reports on industrial production and retail sales also disappointed. Markets around Asia reacted negatively to the news, with most indices falling around 1%.

China has averaged growth of around 10% a year in the past three decades, propelling it up the list of biggest economies, generating wealth for its growing middle class and boosting global trade.

Inflation, a problem in 2012, has been tame so far this year. But economists are worried about a rapid expansion in credit and a red-hot housing market.

Fitch ratings agency warned over excessive debt levels in China and issued a rare local currency downgrade, earlier this month.

Analyst are also worried about possible deflation of housing bubble since the housing market is heating up.

China's central government is already stepping up efforts to cool prices, and Beijing has directed local governments to institute control measures of their own.

CNN news

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