Growth slows to 9.2 percent in 2011

An elderly woman walks past luxury stores in the Wangfujing shopping street of Beijing yesterday. China said its economy expanded an annual 9.2 percent in 2011, slowing from 2010

China said yesterday its economy expanded an annual 9.2 percent last year, slowing from 2010, as efforts to tame high inflation and global turbulence put the brakes on growth.
Gross domestic product (GDP) rose 8.9 percent in the fourth quarter, the National Bureau of Statistics said, slower than in the third quarter, but still exceeding analyst expectations.
The annual figure was down from 10.4 percent in 2010, but analysts said the economy appeared to be holding up well.
“It’s slowing, even though it’s not particularly aggressive. The economy seems to be surprisingly resilient so far,” said Stephen Green, regional head of research for Greater China for Standard Chartered Bank in Hong Kong.
Output from the country’s millions of factories and workshops rose 13.9 percent for all of 2011, a slower pace than in 2010, as manufacturers faced reduced demand from key markets in the United States and Europe.
Urban fixed asset investment – a measure of government spending on infrastructure – rose at a slightly slower pace of 23.8 percent over the 12 months as Beijing started to wind back stimulus measures.
And retail sales, a key indicator of consumer spending, rose 17.1 percent in 2011, slightly slower than in 2010.
Year-on-year growth in China has slowed for four straight quarters as Beijing – anxious about soaring costs – has restricted lending and hiked interest rates, while US and European demand for Chinese-made products has also weakened.
Nonetheless the fourth-quarter GDP growth beat a forecast of 8.6 percent by analysts polled by Dow Jones Newswires.
Li Huiyong, economist at Shenyin Wanguo Securities in Shanghai, said the latest figures indicated China could avoid a hard landing.
“This indicates our economy is still good and quite stable, and a soft landing for the economy is more possible. Therefore, the government is likely to postpone the next policy easing move,” he said.
In a bid to boost growth and counter the slowdown in export demand from Europe and the United States, authorities in December cut the amount of money banks must hold in reserve for the first time in three years.
China’s trade surplus shrank in 2011 to USD 155.14 billion as import and export growth slowed sharply, according to previously released data, after domestic tightening measures and global economic turmoil hit consumption.
Some analysts had expected the government to move again to loosen credit as early as this month, but stronger-than-expected growth in the fourth quarter could give policy-makers breathing room, analysts said.
AFP