China announced its slowest economic growth in at least a decade today, but analysts said there were some signs that the worst could be over for the Asian exporting giant.
The world's third-biggest economy posted annual growth of 6.1% in the first quarter of the year, down from 6.8% in the final three months of 2008, underlining the impact the global crisis is having on China.
The country's problems included a decline in exports, a drop in corporate profits and unemployment. The figure follows 9% growth for all of 2008, reinforcing concerns that China this year will experience its slowest economic expansion in 19 years.
Officials have stressed that China's economy needs to grow by about 8% this year in order to prevent social unrest triggered by widescale unemployment. Before the global economic crisis struck, China had experienced double-digit growth from 2003 to 2007.
'The quarterly growth was the slowest in the past 10 years as the global financial crisis continued to affect the world's fastest-growing economy,' the official Xinhua news agency reported.
Historical data from Beijing statistical authorities are patchy, but Goldman Sachs said growth in the first quarter was actually the slowest since data began being recorded in 1992.
Nevertheless, there were some reasons for optimism, after China in November launched a four trillion yuan ($580 billion) stimulus package to combat the global economic crisis.
Most strikingly, urban fixed asset investments rose 28.6% in the first quarter, while in March alone the increase was 30.3% year-on-year, the bureau said. Industrial output expanded 5.1% in the first quarter of 2009 from a year earlier, but heated up to 8.3% growth in March, the government said.
Despite the signs of a pickup, worldwide economic woes have left China, which last year worried that inflation might be too high, facing deflation.
The consumer price index (CPI), which measures the cost of living and is China's main gauge of inflation, fell 0.6% in the first quarter of 2009 from a year earlier, according to the bureau.
In March the CPI was down 1.2% from a year ago. Compared with February it fell 0.3%, the bureau said. The CPI grew 5.9% in 2008 but has weakened significantly in recent months.
