Economic growth in China falls to a three-year low
BEIJING – China’s economic growth fell to a three-year low, and although analysts said a recovery may be in sight, it will probably be too weak to pull the world out of its slump.
The world’s second-largest economy grew by 7.6 per cent over a year earlier in the three months ending in June, its slowest since early 2009 during the global crisis, data showed Friday.
Analysts pointed to strong bank lending as a sign of a possible recovery in the second half, but slower growth in retail sales and factory output left them uncertain how fast or how vigorously the economy will improve.
“The soft landing is still on track largely as expected, but the rebound may be slightly more drawn out,” said Moody’s Analytics economist Alastair Chan in a report.
The latest data dampen hopes China can make up for weak de- mand from debt-crippled Europe and the United States, which is struggling with a sluggish recovery.
“It is not certain whether or not there will be a strong upward re- bound. But at least the economic growth rate will stop coming down,” said economist Xiao Li at Industrial Bank in Shanghai.
The impact of lower Chinese de- mand could fall hardest on Asian economies that supply industrial components to its vast manufacturing industry, as well as exporters of oil, iron ore and other commodities such as Australia and African nations. Chinese imports of steel, copper and oil have declined by volume over a year ago.
On Thursday, the Asian Development Bank cut its growth forecast for developing Asia to 6.6 per cent from April’s outlook of 6.9 per cent. It cited Europe’s financial crisis, the slow pace of U.S. recovery and lower growth in China and India.
In a positive sign for China, a different measure of growth showed output in the latest quarter rose 1.8 per cent over the previous threemonth period, up from the first quarter’s 1.6 per cent.
Beijing began reporting such quarter-on-quarter growth – the system used by other major economies – only last year.
June bank lending rose 16 per cent over May, beating forecasts.