China's economic growth slows

Economy grew by 7.6 per cent in the second quarter of 2012, the slowest pace in more than three years despite stimulus.

    Export growth has fallen steadily amid anemic global demand and domestic consumer spending has weakened [AFP]
    Export growth has fallen steadily amid anemic global demand and domestic consumer spending has weakened [AFP]

    China has said its economy grew by 7.6 per cent in the second quarter of 2012, the slowest pace in more than three years.

    This dragged down growth for the world's second-largest economy to 7.8 per cent for the first half of the year, the National Bureau of Statistics said on Friday.

    Gross domestic product growth was 8.1 per cent in the first quarter, according to previously released figures. 

    Export growth has fallen steadily amid anemic global demand and Chinese domestic consumer spending has weakened. The government has cut interest rates twice since the start of June and launched a flurry of stimulus measures. 

    Analysts expect economic growth to rebound in the second half of the year but the slowdown raises the threat of job losses and political tensions.

    June retail sales growth was 12.1 per cent adjusted for price changes, down from the previous month's 13.8 per cent growth. Growth in factory output edged down to 9.5 per cent from May's 9.6 per cent.

    In a reflection of government efforts to spur the economy with higher investment, growth in spending on factories, real estate and other fixed assets accelerated to 23.2 per cent in June, up from the previous month's 20.1 per cent.

    Overheating

    The government has orchestrated a controlled slowdown in GDP from previous double-digit growth to prevent an overheating of the economy.

    In March, Beijing lowered its forecast of economic growth this year to 7.5 and has taken measures since then to stimulate the economy.

    Lower demand in other countries for what China produces has taken a bite out of its growth as has weak domestic demand.

    While its economic growth continues to be strong, its government has yet to achieve its goal of creating a more balanced economy that is not so dependent on exports and where demand from consumers at home is far stronger.

    SOURCE: Agencies


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