Chinese economy posts slowest growth in 13 yrs, up 7.8% in Q4

Jan 18 2013, 12:37 IST
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World Bank cut its growth forecast for China this year from 8.6% to a still-rapid 8.4%. (Reuters) World Bank cut its growth forecast for China this year from 8.6% to a still-rapid 8.4%. (Reuters)
SummaryGrowth rate, however, is still marginally higher than the 7.5 per cent target fixed by the govt.

possible downturn in global trade.

China's major economic risks in 2013 still lie in uncertainties in its external markets and domestic property sector, Zhang said.

The government pared the full-year growth target for 2012 to 7.5 per cent from 8 per cent in early 2012.

Many economists are expecting the target to remain unchanged for this year.

The slow growth rate, compared to be blistering double digit GDP rates which China used to for the past three decades is a new phenomena, the new Chinese leadership, headed by Xi Jinping is expected to address.

Xi along with a host of new leaders at various levels were elected in the once-in-a-decade leadership change conference of the ruling Communist Party of China in November last.

He is scheduled to take over as the President succeeding Hu Jintao in March this year.

The number two leader, Li Keqiang, who is an economist is set to succeed, Premier Wen Jiabao.

Economic stability was stated to be the focus of the new leadership reorienting China's expert driven economy, in view global economic crisis to that of one based on domestic consumption, which officials say would take sometime.

Besides rapid urbanisation, which now crossed 52.57 per cent in 2012, drastically changing the complexion of China's agrarian economy, China is also faced with demographic crisis as a result of its over three decades old one child policy

impacting its cheap labour availability.

China has about 185 million people above the age of 60, or 13.7 per cent of the population at present.

The figure is expected to surge to 221 million in 2015 and about 30 per cent by 2030.

Chalking out its plans to speed up the growth rate, China has announced plans to allocate USD 103.56 billion for massive railway expansion this year.

Plush with USD 3.31 trillion foreign reserves, China was expected to step up its investments to further develop its infrastructure to spur growth and roll out limited stimulus packages.

China is also reorienting its exports strategy moving away from European Union, which in the past was its biggest trade partner to developing and emerging markets.

The government has taken measures to cool the property market to avert the chances of a bubble which analysts say has slowed the economy further.

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