07/13/2012, 00.00
CHINA

Economic growth reaches weakest pace in three years

With growth slowing, the authorities need to address the problem politically, at the level of the one-party state that monopolises power and investments. Other data indicate that Beijing's injections of capital have temporarily, and artificially, stabilised the situation.

Beijing (AsiaNews/Agencies) - China's rate of economic growth is slowing down because of the world's economic crisis but especially domestic corruption and the one-party state. China's growth slowed for a sixth quarter to the weakest pace in three years; decision-makers in Beijing must focus more on the matter.

Today's macroeconomic indicators show that measures taken so far have started to stabilise the economy. Gross domestic product expanded 7.6 per cent last quarter from a year earlier, just under the first-half expansion of 7.8 per cent. In March, the target set was 7.5 per cent for this year, down from an 8 per cent goal in place since 2005.

However, this is largely a function of direct aid to the banks and big government corporations to soften the decline. Effects are likely to be temporary.

"I would say probably the worst is over and we are going to see some stabilization and even improvement in growth in the next quarter," Sun Junwei, China economist at HSBC in Beijing said. "It pretty much depends on what will be the strength of further easing, but I think the chance is good that (policy makers) are willing to respond to this growth slowdown."

GDP figures were not the only data released today. Fixed-asset investment excluding rural households increased 20.4 per cent in the first six months from a year earlier. Retail sales rose 13.7 per cent last month, compared with the 13.8 in May. Industrial production expanded 9.5 per cent in June, compared to a 9.8 per cent median estimate.

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