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China's growth rebounds to 7.9 percent

February 20. 2013 2:34AM
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(AP) China's economy rebounded in the final quarter of 2012 but optimism was tempered by warnings the shaky recovery could be vulnerable to a possible downturn in global trade.

Economic growth rose to 7.9 percent in the three months ending in December as a recovery from China's deepest slowdown since the 2008 global crisis took hold, data showed Friday. That was up from the previous quarter's 7.4 percent rate and raised total growth for the year to 7.8 percent China's weakest annual performance since the 1990s.

Forecasters expect China's growth to rise to 8 percent or above in 2013 but say the recovery still could be vulnerable to a downturn in trade or if the communist government fails to keep investment rising.

We see growth rising above 8 percent in the first half of 2013, said Mark Williams of Capital Economics. I don't think China is an economy in need of further stimulus at this point.

This week, the World Bank cut its growth forecast for China this year from 8.6 percent to a still-rapid 8.4 percent.

Chinese growth could suffer a setback if its high investment rates slacken or global trade weakens, the bank said. It said a 5 percent decline in investment could knock 1.4 percentage point off this year's economic growth and 6 percent off imports.

The economic slowdown was due largely to government controls imposed to cool a real estate boom and surging inflation fueled by Beijing's massive stimulus in response to the 2008 crisis. The decline worsened as global demand for Chinese exports dropped unexpectedly, raising the risk of job losses and unrest.

The recovery comes as new Communist Party leaders under General Secretary Xi Jinping take power in a once-a-decade political transition that began in October.

Stronger quarterly growth was widely expected after earlier data showed retail sales, factory output and other indicators rising.

In December, retail sales growth accelerated to 15.2 percent compared with a year earlier, up from the previous month's 14.9 percent, the National Bureau of Statistics reported. Factory output growth rose to 10.3 percent over a year earlier from November's 10.1 percent.


National Bureau of Statistics of China (in Chinese):

Associated Press

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