The Chinese economic growth slowed to 7.7 per cent in the first-quarter of 2013 compared to the same period a year ago, according to the figures released by National Bureau of Statistics (NBS).
The slower growth of economy will affect economies across the world and hurt exporters of raw materials. The country’s industrial output and retail sales tumbled in March showing signs of slowdown in economy.
Shen Laiyun, bureau spokesman of NBS, said: “After 30 years of high-speed economic growth, potential productivity in China has dropped. During the economic transformation period of other countries, such as Germany, Japan and South Korea, their overall economic growth rates also fell to a lower level.”
Frederic Neumann, co-head of Asian economic research at HSBC, told the Financial Times: “For commodity exporters in places like Australia, Latin America and Africa, much slower Chinese growth is very bad news. A lot of supply is coming on stream that was predicated on the idea that China would grow faster than 9 per cent forever.”
Xi Jinping, president of China, said: “I don’t think China will be able to sustain a super-high or ultra-high speed of growth and that is not what we want. China’s model of development is not sustainable, so it is imperative for us to speed up the transformation of the growth model.”
Sheng said he expected China to meet the annual growth target of 7.5 per cent set by China’s new leaders earlier this year. If the economy grew at that rate or less in 2013, it would mark the slowest annual growth since 1990.
Sheng said that China’s “employment figures stand in sharp contrast to those in the US and Europe”.
Consumer inflation grew by 2.4 per cent in the first-quarter from a year earlier.
Meanwhile, the World Bank said that the Chinese growth would slow to between 6 and 7 per cent by the end of the decade.
With the release of the Chinese GDP figures, the Australian dollar dropped 0.6 per cent, while the New Zealand dollar fell 1 per cent against US dollar.
The country’s GDP grew by 7.9 per cent in the fourth-quarter of 2012.