Chinese economy loses momentum

@CNNMoney April 13, 2012: 11:49 AM ET
China gdp

NEW YORK (CNNMoney) -- China's economic growth lost more momentum at the beginning of the year, but other signs are showing the slowdown is unlikely to continue for long.

The Chinese economy grew at an annual pace of 8.1% in the first quarter, the National Bureau of Statistics said Friday, marking a deceleration from an 8.9% growth rate in the prior quarter.

Historically, that is low for China, which has barreled ahead at around 10% for three decades.

But it's also far from the "hard landing" feared by some economists. As the world's second largest economy, a major slowdown in Chinese growth could have a devastating effect on global economic growth.

But economic indicators now show Chinese economic growth may have recently bottomed out, and is starting to bounce back. A government reading on the manufacturing sector has recently shown improvement, as has an OECD forecast of future economic activity.

Meanwhile, Chinese officials have several tools at their disposal to boost economic growth. They've already started increasing the money supply and new loans have started to pick up in the country.

"For some sectors, the slowdown may have felt very hard. But this really is old news -- we have all done our field trips and looked at various reports and knew the economy was weak -- today's data just confirm that," said UBS economist Tao Wang in a note to clients. "Looking ahead, there are already signs of stabilization and improvement."

China's economy started slowing late last year following government efforts to cool rampant inflation and deflate a housing boom in the country.

Meanwhile, a shrinking eurozone economy and sluggish growth in the United States have also weighed on China's manufacturing sector and exports.

The Chinese government is now aiming for economic growth of 7.5% in 2012, lower than its goal for last year of about 8%.

That said, the government almost always overshoots its own predictions.

China's State Information Center, a government think tank, forecasts the economy will grow 8.5% in 2012 overall, despite a temporary slowdown in the first two quarters.

Outside groups are also relatively optimistic. The World Bank predicts the Chinese economy will slow to a 8.2% growth rate this year but rebound to 8.6% in 2013. To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.80%3.88%
15 yr fixed3.20%3.23%
5/1 ARM3.84%3.88%
30 yr refi3.82%3.93%
15 yr refi3.20%3.23%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Economic Calendar
Latest ReportNext Update
Home pricesAug 28
Consumer confidenceAug 28
GDPAug 29
Manufacturing (ISM)Sept 4
JobsSept 7
Inflation (CPI)Sept 14
Retail sales Sept 14
  • -->

    Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.