China's economic growth lowest in 7 years amid global slump

BEIJING, Jan. 22 Kyodo -
China's economy grew at the lowest rate in seven years in the final quarter of
last year, government figures showed Thursday as the global economic slowdown
continues to hit the country's businesses and finances.
China's gross domestic product grew by 6.8 percent in the last three months of
2008, the National Bureau of Statistics said. It marks the lowest GDP growth
rate recorded in China since the final quarter of 2001.
The bureau also revealed that across the whole of last year China's economy
grew by 9 percent, compared with 13 percent the year before. The annual rate of
growth is also the lowest since 2001.
State-run media have reported that millions of jobs have been lost in China's
manufacturing sector in recent months as the global economic slump hits
exports, one of the key contributors to the country's economic growth.
Ma Jiantang, a spokesman for the statistics bureau, told reporters, ''The
deepest impact may have been the fast spreading and worsening global financial
crisis and the effect it has had on domestic growth.''
''The impact of this has quickly spread from large state firms to medium and
small size companies, from the east of the country to China's heartland,'' he
added.
The Chinese Academy of Social Sciences, a government think-tank, estimated last
month that unemployment has reached 9.4 percent in urban areas, much higher
than official figures which do not include migrant workers who have been
hardest hit by the recent layoffs.
State media have also quoted economic analysts saying that China needs to
provide economic growth of about 8 percent a year to provide enough jobs for
people entering the workforce.
A report issued Thursday by analysts at the Swiss finance group UBS said that
after reviewing the latest figures, they now think China's economy will grow by
6.5 percent this year because it has been harder hit by the global downturn
than originally thought.
''Although China's policy response has been forceful and quick in coming, the
adverse shock has turned out to be greater and the end of the global
de-leveraging process is not yet near,'' the report said.
Senior Chinese leaders have warned of the dangers of social unrest because of
the large number of layoffs. Protests have already been staged by some factory
workers who have lost their jobs, particularly in the industrial heartland of
Guangdong Province.
Late last year, China announced a $586 billion stimulus package to try to boost
the economy, including massive investment in infrastructure projects.
The country's central bank has also announced a series of interest rate cuts to
encourage investment and lending.
Ma told reporters China experienced an extremely difficult year in 2008, but he
is confident that government measures will boost investment and domestic
consumption.
''Although GDP was a mere 6.8 percent in the fourth quarter, we still managed
an expansion of 9 percent for the year, which is quite high in my opinion,'' he
said.
Ma also added that China contributed more than 20 percent of global economic
growth last year.
==Kyodo
2009-01-22 20:45:22