04/15/2013, 00.00
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Despite greater liquidity, China's GDP growth slows in the first quarter

The National Bureau of Statistics releases first quarter figures for 2013 showing growth at 7.7 per cent, slower than the 8 per cent expected by analysts. Only retail sales rise higher than forecast. Although the government remains "optimistic" about the future, Asian shares fall.

Beijing (AsiaNews/Agencies) - Despite massive injection of liquidity into the domestic market, the Chinese economy grew in first quarter of this year by 7.7 per cent, down from the fourth quarter of 2012, as well as slower than the 8 per cent forecast by analysts. Already spooked by North Korea's threats, Asian shares lost as well.

Whilst China's real estate investment rose 20.2 per cent Q1 on a year earlier, revenues from property sales rose 61.3 per cent. Industrial output rose instead only by 8.9 per cent on a year ago in March against expectations of 10.0 per cent.

Retail sales grew by 12.6 per cent year-on-year in March, higher than the expected12.5 per cent.

"This number may well explain why there was so much liquidity support in the first quarter," said Tim Condon, head of Asian economic research at ING in Singapore. "Industrial production is unexpectedly weak and that's the source of weakness in GDP," Condon added.

However, "China's economic fundamentals haven't changed. We are confident about future growth and optimistic about achieving this year's growth target," said Sheng Laiyun, spokesman at the National Bureau of Statistics.

For China, the danger comes from abroad. Its exports are highly sensitive to the economic situation of foreign importers, labour markets and monetary policies.

Japan's decision to devalue the yen to push up inflation and improve the competitiveness of its exports will soon in fact affect China.

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