China's growth slows at end of 2011
Published 17/01/2012 | 04:32
China's economic growth slowed in the final quarter of 2011 to its lowest rate in two-and-a-half years as US and European demand plunged and Beijing fought inflation.
The world's second-largest economy grew by 8.9% in the three months ending in December, data showed. It was the slowest expansion since the second quarter of 2009, when the economy grew 7.9%.
China appears on track to avoid the "hard landing" of an abrupt slowdown but needs to do more to reduce reliance on exports and investment-driven growth by boosting consumer spending, analysts said. "Today's outcome seems to confirm a 'soft landing' scenario," said Frances Cheung, of Credit Agricole CIB in Hong Kong.
Slower Chinese growth could have global repercussions if it cuts demand for oil, iron ore, industrial components and other imports and hurts suppliers such as Australia, Brazil and South East Asia.
In 2012, China faces "complexity and challenges" due to global malaise and domestic pressure for prices to rise, said Ma Jiantang, commissioner of the National Statistics Bureau. "We will face a number of risks that affect the steady growth of the Chinese economy," Ma said at a news conference.
For the full year, the economy grew 9.2%, down from 2010's blistering 10.3%, after communist leaders repeatedly hiked interest rates and tightened investment curbs to prevent overheating and inflation.
Hit by an abrupt plunge in Western consumer demand, regulators reversed course in late 2011 and tried to prop up growth by promising more bank lending to help struggling exporters and avert job losses and the threat of unrest.
The plunge in global demand, coupled with lending curbs, drove thousands of small Chinese exporters out of business and forced others to cut jobs, raising the threat of unrest.
Analysts expect Beijing to try to stimulate growth this year with an interest rate cut or other measures to free up money for lending.
Consumer inflation edged down in December to 4.1%, below July's 37-month high of 6.5%. That could give the government more leeway to stimulate the economy but it is still above the official 4% target for the year.