April 13 - China's Q1 GDP growth at weakest in nearly three years, but some economists think Beijing's threshold for minimum growth may now be lower. Arnold Gay reports.
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The poorer-than-expected GDP number, extends China's slide into a fifth quarter, and raises fears the economy has not bottomed.
China's Q1 growth slowed to 8.1 percent, the weakest in nearly three years.
National Bureau of Statistics Spokesman Sheng Laiyun says the slowdown is largely the result of deliberate policy adjustments.
(SOUNDBITE) (Mandarin) SPOKESMAN FOR CHINA'S NATIONAL BUREAU OF STATISTICS, SHENG LAIYUN SAYING:
"China's rate of economic growth fell partly due to changes in the domestic and international economic situation, that resulted in a slowdown in the growth of demand; but in fact, to a major extent, it was the result of the Chinese government's voluntary adjustment."
Bank of Singapore economist Richard Jerram agrees.
(SOUNDBITE) (English) CHIEF ECONOMIST OF BANK OF SINGAPORE, RICHARD JERRAM, SAYING:
"They've slowed inflation down, they've slowed growth down to what looks like a fairly comfortable soft landing and they've got lots of room to cut reserve requirements, ease up on monetary squeeze if they decide they need to. But I think these numbers tell you there's no real urgency to change policy anytime soon."
Growth of eight percent is widely regarded as the threshold at which China struggles to create enough jobs for new entrants to its 800 million-strong workforce.
But with Beijing cutting its official full year growth forecast to 7.5 percent, there is a growing view that China's threshold of what constitutes a hard landing has moved significantly lower.
This means Beijing may not necessarily react to a fall in growth rates below eight percent.
On Thursday (April 12), the World Bank lowered its 2012 growth forecast for China, with lead China economist Ardo Hansson citing several factors.
(SOUNDBITE) (English) WORLD BANK'S LEAD ECONOMIST FOR CHINA, ARDO HANSSON SAYING:
"Domestically we see the tightening of policy impacted directly on investment both the withdrawal of the big stimulus package and the investment into areas like the property sector started to slow down, but in contrast the bright spot of the economy has been consumption which has remained strong as employment has been high, as consumer confidence has been sustained and as real wages have grown strong."
The World Bank cut its China growth forecast to 8.2 percent from 8.4 percent, but raised its 2013 forecast to 8.6 percent.
The global lender expects a rebound in the Chinese economy from the middle of the year.
Arnold Gay, Reuters.
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