A PACE OF SLOWDOWN FASTER THAN EXPECTED

MAINLAND GDP GROWTH SLOWEST IN THREE YEARS

Cary Huang

South China Morning Post, April 14, 2012

The mainland economy grew 8.1 per cent in the first quarter, its slowest pace in nearly three years, amid weak demand in key export markets and sluggish construction activity at home.

The figure was well below the 8.9 per cent year-on-year growth of the previous three months and marked the fifth consecutive quarterly slowdown, adding pressure for Beijing to further ease monetary policies.

But just hours after the release of the data, the central government announced it would continue using macroeconomic controls to deal with the challenges

Beijing also reiterated that it would keep its restrictions on the property market, in a statement released after a State Council meeting presided over by Premier Wen Jiabao .

The quarterly growth figure was even below market expectations of 8.3 to 8.5 per cent.

"The global situation in the first quarter is complex … the pressure on exports growth is enormous," a National Bureau of Statistics spokesman said.

However, analysts predicted the world's second-largest economy would avoid a hard landing, with most expecting easing measures and a rebound later in the year.

Share prices reflected this sentiment, with the Shanghai and Shenzhen stock markets up slightly and Hong Kong's Hang Seng Index jumping 1.84 per cent.

Dr Liao Qun, chief economist of Citic Bank International, said that while a continued slowdown in gross domestic product growth was widely anticipated, the pace of slowdown turned out faster than expected.

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