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Amid complex and grim economic environment at home and abroad, preliminary indicators showed China's economic growth in the first quarter has continued the momentum of moderate slowdown.
However, analysts said the margin of slowdown is still within stable and controllable range and expected new policies to ensure sound development when China tackles the arduous tasks of growth model transformation and economic structure adjusting.
Moderate economic slowdown
According to data published by the National Bureau of Statistics, the troika driving the economic growth, namely investment, consumption and export, all witnessed drops in the first quarter.
China's urban fixed asset investment climbed 21.5 percent from a year earlier, down 2.3 percentage points year-on-year, retail sales rose 14.7 percent year on year to 3.37 trillion yuan in the first two months, sharply lower than the 18.1 percent registered in December, while export increased 6.9 percent in the same period, down 6.5 percentage points from last December.
Premier Wen Jiabao said on Tuesday that despite the decline of a few major economic indicators, China's economy as a whole continues to grow as the government anticipated in its exercise of macro-controls.
"Despite the falls, major economic indicators are still at reasonable levels, and confidence should be maintained on the country's economic work, Wen said during a three-day inspection trip to the southeastern Fujian Province and southern Guangxi Zhuang Autonomous Region.
China's GDP growth may have slowed to about 8.4 percent year-on-year in the first quarter, still boding well for the economy in 2012, said Zhang Xiaoqiang, deputy director of the National Development and Reform Commission.
The National Bureau of Statistics is due to officially announce the quarter's CPI figure on April 9 and GDP four days later.
Affected by European and U.S. debt crisis and self-imposed macro economic controls, Chinas economic growth in 2011 fell consecutively from 9.7 percent in the first quarter to 8.9 percent in the fourth quarter.
China has cut its annual growth target to 7.5 percent this year, an eight-year low and a pace China hopes will give it room to push through structural reforms to achieve "higher-level, higher-quality development over a longer period of time."
"Stable growth has been set as the tone for 2012 by the government in the context of the uncertainties and challenges of the world economy," Zhang said at a lunch session of the Boao Forum for Asia 2012 in the southern Chinese island of Hainan early April.
The first quarter, as the start of Chinas economic development this year, is still on the momentum of moderate slowdown and within peoples expectation, said Zhang Liqun, a research fellow at the Development Research Center of the State Council. Zhang added that the scale of the growth slowdown is controllable.
The view of Liu Yuanchun from Renmin University sounds more optimistic as he cited the positive change in the first quarter of non-manufacturing sector's Purchasing Managers Index (PMI), a key economic indicator, which jumped to an 11-month high of 53.1 percent in March from Januarys 50.5 percent. A PMI reading above 50 percent indicates expansion from the previous month, while below indicates contraction.
Liu further cited favorable conditions globally as U.S. economic recovery is better than expected and Europe seems to have emerged from its worst times of debt crisis.
Ting Lu, China economist at Bank of America/Merrill Lynch in Hong Kong, expects China's annual GDP growth for the first quarter to be 8.3-8.4 percent, easing from 8.9 percent the previous quarter.
"I believe growth will hit the bottom in the first quarter, but a sharp rebound in the following quarters is unlikely," Lu said on the sidelines of the 2012 Boao Forum.
The weaker growth was caused by the impact of Europe's debt crisis, which hurt China's exports, and the lag effect of the central bank's policy tightening, he added.
There is no "hard landing" to worry about, unless growth drops to 7 percent for two consecutive quarters, said Zhang Yuyan, director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences.
According to a report issued Saturday by the Bank of China, China's economic growth is expected to ease to 8.2 percent in the first quarter.
The consumer price index, a main gauge of inflation, is expected to rise by 3.6 percent and 3.0 percent year-on-year in the first and second quarters, respectively, the report said.
The report said sluggish growth for China's trading partners in the European Union, the United States and Japan, as well as excessive industrial capacity and shrinking domestic demand, will be major challenges for the economy this year. |
