China's economy slows further in April

China's economy slows further in April

14.05.2012 – Newly released economic indicators show, that the Chinese economy has slowed further in April, thereby provoking expectations, that the government is pivoted around in a looser policy, to help to, that GDP is stimulated.

The rapidly cooling industrial production and fixed investment with disappointing trade data provide now for more concerns among Chinese policy makers as inflation. Beijing This led to increased concerns about the downside risks, so Experten. “The pace of economic growth could slow in April to its lowest point this year, mainly due to weak exports and the real estate market”, Liu says Yuanchun, Deputy Director of the Institute of Economics at Renmin University in Beijing.

In April, weakened China's consumer price index, a main measure for inflation, on 3,4 Percent year on year from 3,6 Percent in March from, as data from the National Statistics Office show from Friday. Food prices rose last month by seven percent over the previous year compared to 7,5 Percent in March, because falling prices for pork and vegetables were offset by rising vegetable prices. Is predicted in a research report by the Bank of Communications, that the average annual consumer price index 3,3 Percent of 5,4 Percent 2011 could drop.

Inflationary pressure could be put in the first three quarters, while it could increase in the last quarter of the year, says the report. “Inflation is likely to slow further, what is plenty of room for additional policy measures, For example, a faster pace of fiscal spending and a more supportive credit policy”, said Sun Junwei, Chinese economist at HSBC Holdings.

Meanwhile, the second-largest economy in the world last month industrial production growth 9,3 Percent - the slowest in three years - while the growth in retail sales on 14,1 Percent year on year from 15,2 Percent in March slowed. The current production, an indicator of industrial production sector, increased with the slowest pace since May 2009, namely by 0,7 Percent year-on- 371,8 Billion kilowatt-hours. Duncan Freeman, Researchers at the Brussels Institute for Chinese Studies, said, the slowdown of the Chinese economy was partly related to the domestic situation and be strong with the problems connected to the main markets - namely the U.S. and Europe. “The current economic situation in Europe and the United States largely explains the reduction of China's exports”, so Freeman.

On Thursday, published data show, that both import growth and export growth slowed in April, namely by 0,3 Percent and 4,9 Percent. The fact, that economic indicators are worse than expected, on Friday led to market uncertainty. The benchmark Shanghai Composite Index fell by 0,6 Percent 2394, the lowest level since the 24. April. The slowdown in the global economy has slowed, even enthusiasm of some Chinese investors, expand their business abroad, so Shong An-An, Legal advisor at the China desk for Grant Thornton, a company from the Netherlands. While the Chinese government has motivated companies, to go abroad, gaps existed between the reality and the goals, so Shong. “The situation is closely connected with the status quo of the economies in Europe and China.”

Liu Ligang, Chefökonom in China bei der Australia and New Zealand Banking Group, said, the main factor for the worsening business conditions is a continuing tight monetary policy. In April, China's new yuan loans dropped to 681,8 Yuan Milliarden, or 83,24 Billion €, of 1,01 Trillion yuan in March and were thus much lower than the predicted 750 Yuan Milliarden (91,57 Billion €), such as the People's Bank announced on Friday. “The central bank could set the reserve requirement in May to 50 Basis point cut, to bring more liquidity into the market and stimulate economic growth”, so Liu. “Given the grim situation, the government will probably adapt easily to economic policy, to accelerate GDP growth in second quarter”, Liu Yuanchun of Renmin University of China. “It is estimated to be higher than that of the first quarter of 8,1 His percentage.”

In addition, Beijing vigilant against electoral politics in France and Greece, said Kevin Liu, Marketingdirektor bei Exclusive Analysis, a consulting firm in London, sitting. He says, the uncertainties are mainly developed in Europe because of the attitude of the newly elected French President Francois Hollande against austerity measures and the discussion, whether Greece remains in the euro area. “My suggestion is, China to stimulate its domestic economy in the consumption, to gradually replace the market in the U.S. and Europe”, so Freeman.
(china Daily)

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