China's economy slowed dramatically for the second quarter running during the first three months of the year, official statistics revealed yesterday, though analysts said they were beginning to see the first tentative signs of a recovery.
China's annual rate of economic growth slowed from 6.8 per cent previously to 6.1 per cent in the first quarter of 2009, the weakest figure seen since the National Bureau of Statistics first began releasing quarterly data in 1992.
The Chinese government has launched a series of economic stimulus packages in recent months aimed at boosting domestic demand, but is powerless to counter a collapse in demand from international trading partners during a global downturn. China's exports fell by 17 per cent in March alone.
However, Chinese officials said they were relieved that economic growth had not slipped further and pointed to more upbeat data also reported yesterday. Industrial production was up by 5.1 per cent during the first quarter, the government said, while fixed asset investment was up by 28.8 per cent.
Claire Innes, of the analyst Global Insight, welcomed those figures, but warned that China remained dependent on a recovery in the global economy as it strives to hit the government's target of a minimum of 8 per cent growth during 2009.
"China's economy may be being hauled out of the woods, but if the slump in global demand extends beyond our current forecast horizon, which expects a bottoming out in the third and fourth quarters of the year, then the authorities face a truly thorny situation," she said.
Those fears will be compounded by a warning from the International Monetary Fund which yesterday said it did not expect to see a swift recovery from recession. Releasing the first part of its latest World Economic Outlook, the IMF warned that downturns caused by financial crises related to debt have, historically, been more severe and long-lasting than other types of recession.
"Recovery is likely to be slow and relatively weak," the IMF cautioned, adding that continued monetary and fiscal policy initiatives were necessary if the world was to pull out of the current downturn.
Last month, the IMF said it expected the world economy to suffer its first recession for 60 years, with a global decline of up to 1 per cent during 2009. The body is due to unveil its latest economic forecasts next week.Reuse content