THE CHINESE ECONOMY has recorded its slowest economic growth in three years – but has still seen its output rise by over 8 per cent in the last year.
Figures published today showed that output in the first quarter of 2012 was up by 8.1 per cent on the same period in 2011, making the smallest annual growth since the second quarter of 2009.
By comparison, the Times of India notes, growth in the last quarter of 2011 had been up by 8.9 per cent on a year previously.
The figures could be interpreted as a sign that China’s rampant growth is beginning to become more measured, as demand for its output falls elsewhere.
A Chinese slump would also have an impact in oil markets, and could pose political difficulties for Communist Party as it prepares to hand over power to a new generation of leaders later this year.
The Wall Street Journal said the figures indicated that China was moving towards a policy of ensuring its growth could be stabilised and supported, and that it was beginning to pay less attention towards managing inflation.
Analysts admitted that the growth was disappointing, but took positives from the fact that native Chinese consumption now accounts for more and more of China’s output.
The WSJ said consumption now accounts for 76 per cent of China’s output, compared to just 51.6 per cent a year ago. This helped to keep up the growth in GDP while spending on government infrastructure dropped from 54 per cent to 33 per cent.
Another analyst told the Daily Telegraph that property prices were beginning to adjust, as domestic house sales began to slow.
The signs that China is willing to allow higher rates of inflation than before may led to an adjustment in the value of the yuan, a move which will be welcomed by western countries who say China’s undervalued currency has provided an unfair commercial advantage.
This prospect is further heightened by suggestions that China will need to boost the monetary supply in order to stop growth from further deterioration.
Stock markets in Asia were not hampered by the news, with markets in Shanghai, Tokyo, Hong Kong and Singapore all making moderate gains in Friday’s trading.