China's economy grew 6.8% in Q4, the NBS said. GDP grew 9% in Q3. For the year, China's economy grew 9%, a seven-year low; China's economy grew 13% in 2007.
In Q4, industrial production grew 12.9%, down 5.6% percentage points from a year ago. Exports fell 2.8%.
Economist David H. Wang, a China expert, said China's economy is now growing at a rate too-low to absorb new entrants to the workforce.
"The quarterly grow rate is too low, and it obviously reflects the slowing global economy," Wang said. "If the slow growth rate continues China will need to provide more fiscal stimulus to maintain domestic demand." China has already announced more than $5,850 billion in fiscal stimulus in 2008, Wang said, but statisticians differ as to how much of that stimulus represents new spending.
Further, Wang sees continued slowing for China's economy through mid-2009 with GDP increasing by about 4.5-5% in Q1 and 4.0-4.5% in Q2, before starting to recover in Q3.
"The slowing represents a serious test for China's Communist Party. They've implemented market-based reforms and achieved remarkable results, with rapid growth, increasing living standards, increased productivity, and countless business formations," Wang said. "But there's also been employment dislocation, so China will have to return to higher GDP growth rate to prevent unemployment from rising, which is the bugaboo of any market economy."
Economic Analysis: China's slowdown is consistent with slowing growth elsewhere. Further, it would be great if China's recovery could start in Q2/Q3, with increasing domestic demand, to serve as a growth engine for both the Asian and global economies.
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