Category: Economy

China’s economy grew at its slowest pace in 18 months in the first quarter of 2014, official data showed on Wednesday, with signs of waning momentum already prompting limited government action to steady the world’s second-largest economy. Authorities have ruled out major stimulus to fight short-term dips in growth, and some analysts think the economy will continue to lose momentum into the middle of the year. The economy grew 7.4 percent in the January-March quarter from a year earlier, slightly stronger than the median forecast of 7.3 percent in a Reuters poll but still slowing from 7.7 percent in the final quarter of 2013. It was China’s slowest annual growth since the third quarter of 2012, when growth was also 7.4 percent. Economists were split on the outlook, with some predicting that growth had stabilized and that the government would stand pat on policy. Others, however, […]

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China’s expansion moderated to the weakest pace in six quarters and property construction plunged, testing leaders’ commitment to keep reining in credit as risks mount of a deeper slowdown. Gross domestic product rose 7.4 percent in the January-to-March period from a year earlier, the statistics bureau said today in Beijing, compared with the 7.3 percent median estimate in a Bloomberg News survey of analysts. Industrial production and fixed-asset investment trailed projections. The weakest first-quarter property-investment growth since 2009 signals credit is tight and demand is faltering, adding to economic and default dangers as Premier Li Keqiang grapples with risks from shadow banking and local-government debt. A deeper slowdown would put pressure on leaders to expand stimulus or limit the pace of changes intended to give market forces a bigger role in the world’s second-largest economy. “The property market is probably the biggest risk this year, because this is not […]

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China’s growth slowed sharply in the first quarter of 2014, raising pressure on Beijing to provide a fresh round of government stimulus to prop up faltering growth in the world’s second-largest economy. In the three months to the end of March, China’s gross domestic product expanded 7.4 per cent from the same period a year earlier, a slowdown from 7.7 per cent growth in the fourth quarter of 2013 but faster than the 7.2 per cent pace that some analysts had predicted. The expansion in the first quarter, revealed by China’s National Bureau of Statistics on Wednesday, was the slowest since the third quarter of 2012 when the government loosened monetary policy and accelerated infrastructure investment as growth dropped to 7.4 per cent. China’s slowest quarterly growth in recent years was a trough of 6.2 per cent, in the immediate aftermath of the global financial crisis in 2009. […]

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China’s consumer inflation rate increased in March as fresh food prices jumped, but persistent deflation in the industrial sector was another signal of weak demand and slowing growth in the world’s second-largest economy. The consumer price index (CPI) rose 2.4 percent in March from a year earlier, the National Bureau of Statistics said on Friday, more from a 2.0 percent rise in February but just below the median forecast in a Reuters poll. Fresh food prices were a major contributor, with fruit prices up an annual 17.3 percent and vegetables up 12.9 percent, although analysts said food inflation was showing signs of moderating. Pork prices fell 6.7 percent from a year earlier. Producer prices fell in annual terms for the 25th straight month, dropping 2.3 percent, slightly more than expected. "Overall, we expect inflation pressures to remain benign amid tepid domestic demand," Barclays economists said in […]

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Falling prices in China have reinforced fears of the slowdown in the world’s second-largest economy , highlighting sluggish consumer demand and the struggles of over-extended factories. Consumer prices fell 0.5 per cent in March from the previous month, while producer prices remained mired in deflationary territory for a 25th-consecutive month, according to figures published by the national bureau of statistics on Friday. Coming on the heels of weak trade figures , slower credit issuance and big declines in property sales, the price data reinforces the picture of a disappointing first quarter for the world’s second-largest economy. Analysts have rushed to downgrade their forecasts for Chinese growth and now predict that the economy will expand 7.4 per cent this year, its softest in more than two decades. The downturn has fuelled expectations that the government will prop up growth, but Li Keqiang, the premier, on Thursday rebuffed calls for […]

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A robust services sector will not stop China’s economy from slowing into the middle of the year, analysts said after modest government stimulus was seen as a signal authorities want to steady growth to keep their reform drive on track. Two surveys on Thursday showing growth in the service sector offered some relief after a run of disappointing data this year, but did little to alter the view that the world’s second-largest economy has lost more momentum than expected in 2014. On Wednesday, the government said it would accelerate construction of rail projects and cut taxes for small firms, the first concrete action this year to boost activity. "The scale of the stimulus is modest, likely aimed at smoothing GDP growth at around the 7.5 percent target, rather than another round of massive stimulus," HSBC economists said in a report. The targeted moves showed authorities wanted […]

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A robust services sector will not stop China’s economy from slowing into the middle of the year, analysts said after modest government stimulus was seen as a signal authorities want to steady growth to keep their reform drive on track. Two surveys on Thursday showing growth in the service sector offered some relief after a run of disappointing data this year, but did little to alter the view that the world’s second-largest economy has lost more momentum than expected in 2014. On Wednesday, the government said it would accelerate construction of rail projects and cut taxes for small firms, the first concrete action this year to boost activity. "The scale of the stimulus is modest, likely aimed at smoothing GDP growth at around the 7.5 percent target, rather than another round of massive stimulus," HSBC economists said in a report. The targeted moves showed authorities wanted […]

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©EPA Delegates from Hong Kong who made the pilgrimage to the mainland to take part in the National People’s Congress in mid-March came away impressed with the capability of Chinese president Xi Jinping, the most powerful leader of China since Deng Xiaoping. “He will never let the economy fall apart,” one delegate said. Their only doubt? The outsized vigour with which Mr Xi is pursuing his anti-corruption campaign . This delegate complained bitterly about being put up at a three star hotel in which even bottled water was not supplied, let alone whisky or fine wine. Meanwhile, across the Pacific, many people have sounded the alarm about Beijing’s ability to rein in credit growth and rebalance the economy more towards domestic demand and services and away from commodity-intensive fixed asset investment. But in Hong Kong and China itself, faith in the ability of the government to correct the excesses […]

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