Reuters reported that China economy expanded at its weakest pace in 2-1/2 years in the latest quarter, with the sagging real estate and export sectors heralding a sharper slowdown in coming months and fresh pro-growth measures from the government.
Growth of 8.9%YoY was slightly stronger than the 8.7% forecast by economists in a Reuters poll, but the data on Tuesday raised concerns about the immediate outlook and how much support China can offer a struggling global economy.
Gross domestic output rose just 2% from the previous quarter, suggesting to some economists that underlying momentum is slowing more rapidly than headline data implies.
A near 40% plunge in the annual pace of property investment in December versus November rate underscored risks to China domestic demand even as it is trying to cope with those emanating from debt-ridden Europe China biggest export market.
Ms Yao Wei an economist at Societe Generale in Hong Kong, who forecasts growth slowing to 8.3% in the first three months of 2012."It indicates that in Q1 2012 the numbers will be very unpleasant. Policy easing will continue."
She said "It's a very significant slowdown already in China."
Growth for all of 2011 slipped to 9.2% a pace last seen in 2009 during the global financial crisis from 10.4% in 2010.
Beijing is likely to stick to what Premier Mr Wen Jiabao has called fine-tuning of economic policy settings to counter the downturn for now, rather than adopting more aggressive measures such as a cut in interest rates.
December's retail sales growth of 18.1% on the year was well above forecasts and industrial production also staged a slight uptick in real terms in December versus November.
Mr Ting Lu China economist at Bank of America/Merrill Lynch in Hong Kong said "On policy, we expect Beijing will read both positive and negative messages from the Q4 data and further adjust their policies."
He said that "Simply put, Beijing will continue its policy easing which was started in mid-October, though we should not expect a big-bang stimulus."
China policymakers have unveiled a series of policy tweaks from tax breaks for small firms to a cut in the proportion of deposits the country banks must hold as reserves in a bid to boost corporate credit and money supply.
(Sourced from Reuters)
