2 min read

BEIJING – China appears on track to avoid an abrupt economic slowdown with possible global repercussions, after growth eased to a still-robust 8.9 percent in the last quarter of 2011.

The expansion in the world’s second-largest economy was the slowest in 2½ years, but December retail sales and factory output accelerated, data showed Tuesday. Growth in the previous quarter was 9.1 percent.

“Today’s outcome seems to confirm a ‘soft landing’ scenario,” said Frances Cheung of Credit Agricole CIB in Hong Kong.

China is one of the biggest importers, and slower growth could have global repercussions if it cuts demand for iron ore, industrial components and other goods from Australia, Brazil, Southeast Asia and elsewhere.

Growth decelerated in 2011 as Beijing hiked interest rates and tightened investment curbs to prevent overheating and tame politically dangerous inflation. Communist leaders reversed course and started easing lending late in the year after plunging U.S. and European export demand raised the threat of job losses and unrest.

The slowdown was in line with government plans, said Ma Jiantang, commissioner of the National Bureau of Statistics. He said the “ideal situation” would be to keep growth between 8.5 percent and 9 percent, with inflation low.

Advertisement

In 2012, China faces “complexity and challenges” because of global malaise and pressure for prices to rise, Ma said at a news conference. Still, he said, “The fundamentals of China’s long-term steady economic growth have not changed.”

Growth in the three months ending in December was the slowest since the second quarter of 2009, when the economy expanded 7.9 percent.

Retail sales growth rebounded to 18.1 percent from November’s 17.1 percent, while factory output rose 12.8 percent, up from November’s 12.4 percent.

“This all reaffirms our outlook on China for a soft landing,” Moody’s Analytics economist Glenn Levine said in a report. “Export demand has cooled, but domestic demand is still running strong.”

Also in 2011, China’s urban population exceeded the number of rural dwellers for the first time, rising to 51.3 percent of the nation’s 1.3 billion people, the government reported.

Comments are no longer available on this story