China said today that its economy expanded by 9.2% last year, slowing from 2010, as global turbulence and efforts to tame high inflation put the brakes on growth.
But the still healthy annual growth suggested that the world's number two economy would avoid a much-feared hard landing despite slumping demand from key export markets in the US and Europe, analysts said.
The figures, down from 10.4% growth in 2010 but well above the government 2011 target of 8%, also suggest the central bank will be less likely to ease credit in the short-term.
China's gross domestic product (GDP) grew 8.9% in the fourth quarter, the National Bureau of Statistics said, slower than in the third quarter, but still exceeding analyst expectations.
Output from the country's millions of factories and workshops rose 13.9% for all of 2011, a slower pace than in 2010, as manufacturers faced reduced demand from key export markets.Urban fixed asset investment - a measure of government spending on infrastructure - rose at a slightly slower pace of 23.8% last year as Beijing retreated from stimulus measures.
Retail sales, a key indicator of consumer spending, rose 17.1% in 2011, slightly slower than in 2010, despite government moves to boost domestic consumption and make it play a greater role in economic growth.
Statistics bureau chief Ma Jiantang warned that China could face a tough year ahead in light of Europe's sovereign debt crisis. "We must say that 2012 will be a year of complexity and challenges," he told a news conference.
"Given the turbulence in international financial markets and more serious protectionism in various forms, we're going to face serious challenges," he said. He played down worries over debt-burdened local governments and a collapse in the property market as the government seeks to bring down home prices.
Local governments, which are banned from borrowing directly from banks, have set up financing vehicles to fund infrastructure and other projects but growing debts have fuelled concerns about a potential explosion in bad loans.
China introduced a range of measures aimed at bringing down property prices last year, such as bans on buying second homes in some cities, hiking minimum down-payments and introducing property taxes.
"We believe that as long as we work hard we will be able to maintain steady and fairly fast economic growth in 2012," Ma said.
Most economists are predicting GDP growth of 8-8.5% for 2012. China will unveil its economic growth target at the annual session of the legislature in March. Year-on-year growth in China has slowed for four quarters in a row as Beijing - anxious about soaring costs - restricted lending and hiked interest rates, while US and European demand for Chinese-made products also weakened.
Nonetheless the fourth-quarter GDP growth beat a forecast of 8.6% by analysts. The news lifted China's stock market, with the benchmark Shanghai index closing up more than 4% today.
In a bid to boost growth and counter the slowdown in export demand, authorities in December cut the amount of money banks must hold in reserve for the first time in three years. Some had expected the government to move again to loosen credit as early as this month, but stronger-than-expected growth in the fourth quarter could give policy-makers breathing room, analysts said.
China's city dwellers overtake rural population
China said today the number of people living in cities exceeded the rural population for the first time, a historic shift that experts said would put a strain on society and the environment.
The change marks a turning point for China, which for centuries was a mainly agrarian nation but has witnessed a huge population shift to cities over the past three decades as people seek to benefit from rapid economic growth.
Urban dwellers now represent 51.27% of China's entire population of nearly 1.35 billion - or 690.8 million people - the National Bureau of Statistics (NBS) said. It added that China had an extra 21 million people living in cities by the end of 2011 compared to a year earlier - more than the entire population of Sri Lanka - while the number of rural dwellers dropped.
A significant portion of those moving to cities are migrant workers - rural residents seeking work in urban areas - who have helped fuel growth in the world's second-largest economy.
A national census published in April last year showed China counted more than 221 million migrants, and a government report released months later predicted that more than 100 million farmers would move to cities by 2020.
But migrants are often treated as second-class citizens in the towns or cities they live in, as they are still registered as rural residents and have little or no social security. Many migrant workers - especially the younger, so-called second generation - are increasingly frustrated with the treatment they receive, and the issue has in some cases sparked violent unrest.
According to official figures, the rate of urbanisation in China has gathered pace over the past decades. In 1982, only one in five people lived in cities. By 1990, urban dwellers represented 26% of the total population, a figure that rose to 36% in 2000 and jumped faster over the next decade to reach 51.27%.
Analysts said the rising number of urban dwellers would put a strain on resources as new or expanded cities would have to be built, with more transport, energy, water plants and other infrastructure needed to cater for more people.
