Economic Growth in China Slows to 6.1%

123jump.com Staff
16 Apr, 2009
New York City

In the first quarter economy expanded at 6.1% in China, the sharpest decline in two decades and slowest growth in a decade. Inflation in China declines to 1.2% in March as retailers and suppliers face shrinking domestic and export demand.

[R]6:00AM New York, 6:00PM Hong Kong – In the first quarter economy expanded at 6.1% in China, the sharpest decline in two decades and slowest growth in a decade. China’s inflation declines to 1.2% in March.[/R]

Market Sentiment

In Hong Kong trading Hang Seng Index shed 0.6% or 86.63 to 15,582.99, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, declined 1.8% or 164.23 to 9,141.23. In Shanghai trading CSI 300 Index was flat at 0.12 to 2,687.11.

Daily turnover on main-board increased to HK$74.6 billion from HK$66.3 billion yesterday

China’s GDP Eases 6.1% in Q1

National Bureau of Statistics reported today that the country’s gross domestic product fell 0.7 percentage points from the December and 4.5 percentage points from the same period a year ago to 6.1% in March.

In the period, industrial output increased 5.1%, while fixed asset investment advanced 28.8% to Rmb2.8 trillion.

Investment in new projects in the first two months gained 87.5% from the comparable year ago period.

In addition, retail sales rose 15% to Rmb2.94 trillion.

The NBS spokesperson Li Xiaochao said economic recovery prospects are dimmed by falling export demand, dropping corporate profits and revenues, including soaring unemployment.

China Inflation Drops 1.2% in March

Separately, the National Bureau of Statistics reported that the consumer price index fell 1.2% in March from a year earlier compared with a drop of 1.6% in February.

However, the index shed 0.6% in the three months ended March. Food prices climbed 0.5% in the first quarter.

Retail sales also soared 15% to Rmb2.94 trillion yuan as urban sales of consumer goods rose 14.1% to Rmb1.98 trillion, while sales in rural areas increased 17% to Rmb956.4 billion.

Economy in Better-Than- Expected Shape, Jiabao

Xinhua News Agency reported Chinese Premier Wen Jiabao said today the the stimulus interventions by the government have begun to take effect and the economy is now in a ""better-than-expected"" shape.

Jiabao noted that investment, consumption and industrial output are increasing and there is abundant liquidity in the banking system.

China is currently implementing its Rmb4 trillion stimulus plan that is meant to prop the economy.

Gainers & Losers

Hong Kong stocks dropped 0.6% after China reported today that the country’s economy eased to 6.1% in the three months ended March, falling the most in 10 years.

Disappointing earnings results also dragged markets lower.

PICC P&C fell 9.7% to HK$4.74 after it reported that profit fell 98% in 2008. Brokerage Credit Suisse downgraded the stock to “neutral” from “outperform.”

China Eastern Airlines dropped 5.6% to HK$1.34 after reporting a loss of Rmb15.3 billion in 2008.

China Huiyuan Juice rose 7.1% on news more investors are seeking to buy into the company following Coca-Cola’s $2 billion rejected bid.