News / Asia

Is China's Economy Headed for Slowdown?

An employee counts Chinese 100 yuan banknotes at a branch of Bank of Communications in Shenyang, Liaoning province July 6, 2012.
An employee counts Chinese 100 yuan banknotes at a branch of Bank of Communications in Shenyang, Liaoning province July 6, 2012.
Stephanie Ho
BEIJING – As the United States and Europe work to recover from their own economic crises, China has been one of the world's bright spots. But recent figures show that the country's fast economic growth is slowing.
 
Days ago, Chinese Premier Wen Jiabao signaled that the country's top leadership is concerned about an impending economic slowdown. He urged the government to implement policies to offset the “huge downward pressure” on the Chinese economy.
 
His comments foreshadowed China's second quarter growth figures for this year, which were announced Friday by National Bureau of Statistics spokesman Sheng Laiyun.
 
Sheng says China's economy grew by 7.8 percent for the first half of this year. Meanwhile, he says the economic growth rate for the second quarter of this year slowed from 8.1 percent in the first quarter to 7.6 percent.

China GDP Growth, 2007 - 2012China GDP Growth, 2007 - 2012
x
China GDP Growth, 2007 - 2012
China GDP Growth, 2007 - 2012
He acknowledges that this is the first time in three years that China's GDP growth rate has dipped below eight percent, but adds he does not think it is a bad thing.
 
According to Sheng, people should not only focus on the numbers, but also take into account unspecified domestic and external factors. From this perspective, he says China's economy has maintained what he described as steady growth.
 
Song Hong, a trade expert at the Chinese Academy of Social Sciences, says the pressure the Chinese premier was talking about is partially due to China's diminished trade figures, which he blames on European debt woes and the 2011 Japanese earthquake. At the same time, he says he thinks domestic demand in China will continue to increase and will help pull the whole economy up.
 
Song says the demand for things like oil and cars is still increasing rapidly, and that Chinese consumer demand will be, "faster than any government stimulus measures to increase imports".
 
The latest growth figures are China's lowest since the 2008 global financial crisis, but they are still higher than the official annual target of 7.5 percent.
 
Stephen Green, of Standard Chartered Bank, says he thinks the Chinese government has been taking short-term steps to try to avoid a hard economic landing.
 
“These kinds of measures - cutting interest rates, doing infrastructure spending, more money in infrastructure - should help to stabilize the economy," noted Green. "And we think by some time around August, September, we will be seeing clearer signs that the economy is stabilized and is beginning to grow faster.”
 
He adds, though, that the Chinese economy needs to undergo more extensive reforms if it wants stronger and more sustainable growth. He says one major challenge will be reducing the presence of state-owned companies in industries across the board - including transportation, finance and health care.
 
“It's like opening a door to a room, inviting the private sector to come in, and then seeing that these enormous elephants are in that room and there is no way to actually come in, because big state companies are actually dominating these sectors," Green said. "So what we would love to see is more aggressive moves - I personally think that if you are really serious about the private sector being involved in rail, or roads, or hospitals, you are going to have to see the state sector start selling some assets to create some space for the private sector to get involved.”
 
China's government has noted international concerns over its economic slowdown, but is not alarmed.
 
Earlier this week, Foreign Ministry spokesman Liu Weimin said some estimates are positive and some are negative, but not all are accurate.
 
Liu adds that the Chinese government will always implement macroeconomic policy coordination and regulations according to the actual conditions for the economy.
 
He also hinted that the slowing is deliberate. He said these days, when it comes to the Chinese economy, the government is “now putting more emphasis on quality, rather than quantity.”

You May Like

Egypt's Suez Canal Dreams Tempered by Continued Unrest

Seen as a potential driver of recovery, Cairo’s plan to expand waterway had been raising hopes to give country much needed economic boost More

Ebola Maternity Ward in Sierra Leone First of its Kind

Country already had one of world's highest maternal mortality rates before Ebola arrived, virus has added even more complications to health care More

Malaysia Flight 370 Disappearance Ruled Accident

Aircraft disappeared on March 8, 2014; with ruling, families of 239 passengers and crew can now seek compensation from airline More

This forum has been closed.
Comment Sorting
Comments
     
by: Wangchuk from: NYC
July 19, 2012 10:27 AM
Most of the economic data from China can't be trusted or verified. Many economists will tell you China clearly inflates its GDP figures. The CCP doesn't want bad economic news because it's afraid Chinese people will revolt if the economy tanks, since most Chinese people feel no particular loyalty to the CCP, unless the CCP can deliver on jobs & the economy.


by: Godwin from: Nigeria
July 14, 2012 2:06 PM
'Quality rather than quantity' is a big lie. China goods flooding the African markets are fake and substandard. Unfortunately poverty and bad government have made the average African prefer those booby traps of cheap goods which are essentially not cheap in that one spends much more buying the same "cheap" thing many times over. The deception is not without the collaboration of the established trade names in Europe and Japan which have sold household appliances and other trade franchises to China by which it dupes the people, especially in Nigeria. China should be down and out because it helps in no small measure to impoverish gullible and defenseless African consumers.

In Response

by: fong from: Nigeria
July 17, 2012 1:00 AM
You may be a tool of the United States


by: Duleepa from: Sri Lanka
July 14, 2012 6:19 AM
Why China should privatize the lucrative state owned companies? How the economy boosts then? Kindly request an answer for these questions?

In Response

by: Duleepa from: Sri Lanka
July 15, 2012 12:40 PM
Hi Chunguihechu,

Thank you very much for your informative reply.

In Response

by: chunguihechu from: China
July 14, 2012 9:38 PM
The state-owned companies do make profits only when they monopolize one field or another, like fuel gas and oil industry in China, which seems to be Chinese model to spur its economy for government to take hold of some key industries the same time let go small and medium sized ones. Not only China but also other big powers take control over their vital sectors when it comes to ownerships. And thus ‘free economy’ is by no means free at all. Case in point is to what extent the hold goes on. Monopolizing fences off competition while rampant rivalries leads astray.


by: Jonathan Huang from: canada
July 14, 2012 12:21 AM
VOA did you mean " Is China's economy HEADING for slowdown?"?


by: Worry from: U.S.
July 13, 2012 7:23 AM
China is facing the problem of inadequate internal demand. The bulk of the population cannot afford the products that it would normally export. So, when China's normal trading partners retrench, its internal market is not up to the challenge of absorbing its surplus output. India, which faces a comparable situation, also suffers from this to a lesser extent.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Groundbreaking Hand-Painted Documentary About Van Gogh in Productioni
X
George Putic
January 29, 2015 9:43 PM
The troubled life of the famous 19th century Dutch painter Vincent van Gogh has been told through many books and films, but never in the way a group of filmmakers now intends to do. "Loving Vincent " will be the first ever feature-length film made of animated hand-painted images, done in the style of the late artist. VOA’s George Putic reports.
Video

Video Groundbreaking Hand-Painted Documentary About Van Gogh in Production

The troubled life of the famous 19th century Dutch painter Vincent van Gogh has been told through many books and films, but never in the way a group of filmmakers now intends to do. "Loving Vincent " will be the first ever feature-length film made of animated hand-painted images, done in the style of the late artist. VOA’s George Putic reports.
Video

Video Rock-Consuming Organisms Alter Views of Life Processes

Scientists thought they knew much about how life works, until a discovery more than two decades ago challenged conventional beliefs. Scientists found that there are organisms that breathe rocks. And it is only recently that the scientific community is accepting that there are organisms that could get energy out of rocks. Correspondent Elizabeth Lee reports.
Video

Video Paris Attacks Highlight Global Weapons Black Market

As law enforcement officials piece together how the Paris and Belgian terror cells carried out their recent attacks, questions are being asked about how they obtained military grade assault weapons - which are illegal in the European Union. As VOA's Jeff Swicord reports, experts say there is a very active worldwide black market for these weapons, and criminals and terrorists are buying.
Video

Video Activists Accuse China of Targeting Religious Freedom

The U.S.-based Chinese religious rights group ChinaAid says 2014 was the worst year for religious freedom in China since the end of the Cultural Revolution. As Ye Fan reports, activists say Beijing has been tightening religious controls ever since Chinese leader Xi Jinping came to office. Hu Wei narrates.
Video

Video Super Bowl Ads Compete for Eyes on TV, Web

Super Bowl Sunday (Feb. 1) is about more than just the NFL's American football championship and big parties to watch the game. Viewers also tune in for the world famous commercials that send Facebook and Twitter abuzz. Daniela Schrier reports on the social media rewards for America’s priciest advertising.
Video

Video Theologians Cast Doubt on Morality of Drone Strikes

In 2006, stirred by photos of U.S. soldiers mistreating Iraqi prisoners, a group of American faith leaders and academics launched the National Religious Campaign Against Torture. It played an important role in getting Congress to investigate, and the president to ban, torture. VOA's Jerome Socolovsky reports.
Video

Video Freedom on Decline Worldwide, Report Says

The state of global freedom declined for the ninth consecutive year in 2014, according to global watchdog Freedom House's annual report released Wednesday. VOA's William Gallo has more.
Video

Video MRI Seems to Help Diagnose Prostate Cancer, Preliminary Study Shows

Just as with mammography used to detect breast cancer, there's a lot of controversy about tests used to diagnose prostate cancer. Fortunately, a new study shows doctors may now have a more reliable way to diagnose prostate cancer for high risk patients. More from VOA's Carol Pearson.
Video

Video Smartphones About to Make Leap, Carry Basic Senses

Long-distance communication contains mostly sounds and pictures - for now. But scientists in Britain say they are close to creating additions for our smartphones that will make it possible to send taste, smell and even a basic touch. VOA’s George Putic reports.
Video

Video Former Sudan 'Lost Boy' Becomes Chess Master in NYC

In the mid-1980’s, thousands of Sudanese boys escaped the country's civil war by walking for weeks, then months and finally for more than a year, up to 1,500 kilometers across three countries. The so-called Lost Boys of the Sudan had little time for games. But one of them later mastered the game of chess, and now teaches it to children in the New York area. VOA’s Bernard Shusman in New York has his story.
Video

Video NASA Monitors Earth’s Vital Signs From Space

The U.S. space agency, NASA, is wrapping up its busiest 12-month period in more than a decade, with three missions launched in 2014 and two this month, one in early January and the fifth scheduled for January 29. As VOA’s Rosanne Skirble reports, the instruments being lifted into orbit are focused on Earth’s vital life support systems and how they are responding to a warmer planet.
Video

Video Crowded Republican Presidential Field Off to Early Start for 2016

It seems early, but the 2016 U.S. presidential election campaign is already heating up. Though no one has officially announced a candidacy, several potential Republican contenders have been busy speaking to conservative groups about making a White House run next year. Many of the possible contenders are critical of the Obama administration’s foreign policy record. VOA national correspondent Jim Malone reports.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid