BEIJING (Reuters) - China’s economic growth slumped to 6.8 percent last quarter, dragging down the pace of expansion for all of 2008 to a seven-year low of 9.0 percent as the full force of the global financial crisis struck home.
Fourth-quarter gross domestic product growth, measured from a year earlier, dropped from the 9.0 percent clip of the July-September quarter and undershot market expectations of a 7.0 percent reading.
The slowdown snapped a five-year streak of double-digit growth that has turned China into the third-largest economy in the world after the United States and Japan.
“The international financial crisis is deepening and spreading with continuing negative impacts on the domestic economy,” the National Bureau of Statistics said in a statement on Thursday accompanying the release of the figures.
Many economists believe the economy will expand by no more than 5-6 percent this year, which would be the weakest performance since 1990.
Others expect the government to hit its target of 8 percent growth as a 4 trillion yuan ($585 billion) stimulus package and much easier monetary policy kick in.
The figures were consistent with recent data showing falling power consumption and back-to-back declines in both exports and imports as the bottom fell out of the world economy.
An estimated 10 million migrant workers have already lost their jobs in export industries battered by a collapse in demand in the United States and Europe and the evaporation of trade finance as hard-hit global banks cut off credit lines.
Beijing has made no secret of its concern that rising unemployment poses a threat to social stability and the legitimacy of the ruling Communist Party and has vowed to do whatever it takes to crank up growth and jobs.
The statistics office stressed the need to promote steady and rapid economic growth in order to maintain a “harmonious and stable social climate.”
Reporting by Zhou Xin and Simon Rabinovitch; Writing by Alan Wheatley; Editing by Ken Wills