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[ZT] China GDP Grows 6.8%, Slowing Sharply

已有 1848 次阅读  2009-01-21 22:22

China GDP Grows 6.8%, Slowing Sharply

BEIJING -- China's government said the economy expanded 6.8% from a year earlier in the fourth quarter of 2008, confirming a dramatic downturn that has cut growth rates in the world's third largest economy nearly in half in just a single year.

The latest figure means that full-year growth for 2008 was 9.0%, the National Bureau of Statistics said Thursday, marking the first time since 2002 that China has expanded by less than 10% annually. The fourth-quarter number is a dramatic decline from 2007, when the economy was roaring ahead at a 13-year-high rate of 13% for the full year, according to revised figures issued last week.

The current growth rate puts China in danger of falling below the government's longstanding annual target of 8.0%, and is likely to raise new concerns about job losses and the prospect of social instability. The increase in gross domestic product, or the value of all goods and services produced in the economy, had already slowed in the third quarter to 9.0% from a year earlier, and some economists expect growth could slow further this year.

China, whose economy is bigger than those of all but the U.S. and Japan, remains the fastest-growing of the major powers. But the abruptness of the recent slowdown has surprised almost all observers of the economy. The weakness has dimmed hopes that China would provide major support to the global economy at a time when the U.S., Europe and Japan are all in or near recession.

While China's annual growth is still positive, recent months have felt like the onset of a recession to the millions of workers who have lost their jobs. Rising unemployment and a series of resulting labor protests have fueled Chinese government concerns about social stability -- although so far unrest has been isolated, and hasn't shaken the Communist Party's hold on power.

Most economists believe the worst is not yet over, though there could be some improvement by March as the impact of China's massive stimulus program takes hold. China's government has for the last several years announced an annual target of 8% growth, which it sees as a baseline for ensuring employment and social stability. While officials have repeatedly said they think 8% in 2009 is attainable, others have serious doubts. Some private economists predict growth will be as low as 5% this year.

"The international financial crisis is deepening and spreading, with continuing negative impacts on the domestic economy," Ma Jiantang, commissioner of the statistics bureau, said in a statement.

The government is taking aggressive measures to stimulate growth, but is hampered by the fact that two of the major engines behind the recent boom -- housing and export manufacturing -- are sputtering at the same time. Earnings of Chinese exporters had already begun to slow when the U.S. went into recession in December 2007. But China's economic fortunes really began to deteriorate when its own housing bubble started to burst in the middle of 2008.

A sharp run-up in home prices in late 2007 led to restrictive measures, including interest-rate hikes, by a government worried about affordability. Buyers stayed away en masse: housing sales have declined outright every month since April, and were down about 18% for the year. That cut into construction, which employs tens of millions of migrant workers, and hammered crucial heavy industries like steel.

At the same time, a global surge in commodity prices and inflation was crimping consumers' incomes. China's price controls also led to shortages of fuel and electricity, which further constricted industrial activity.

The sharp falloff in global demand in October, after the U.S. financial crisis intensified, pulled China's already weakening-exports into their first sustained decline in a decade. It also dealt further blows to the confidence of consumers, who continue to cut back on purchases of big-ticket items like cars and appliances. In response, the government has unveiled increasingly aggressive increases in spending and cuts in interest rates. Aid plans for the automotive and steel industries were announced last week, and further measures for other industries are expected soon.

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