China Posts Moderate Growth in Q4 2011, Analysts Flag Likely Slow Down
China has registered a minimal expansion of 8.9 per cent in the last quarter of 2011, giving away signals that the dreaded slow down predicted by economists could finally descend in 2012.
The new numbers, despite revelation of weaker housing market and lesser export shipments, exceeded market forecasts of 8.7 per cent growth for the period, which dispelled speculations that major drags should come soon.
Analysts, however, are optimistic that China's economic managers will finally take the cue to gradually implement policy changes that would check the overheating of the world's second-biggest economy.
Lesser interventions coming from Beijing are expected this year, experts said, as China feels the pressure of guarding the health of its economy in light of the deep challenges being faced by major economies in Europe.
For much of 2012, finance experts are hoping that the Chinese central bank will allow for at least four rounds of rate cut backs, bearing 50 basis points each, if only to ease down possible inflationary pressures that may develop this year.
Also, major Chinese banks could be given more breathing room should the country's central bank opt for downward revisions of reserves they need to maintain, analysts said.
But with little danger ahead, many are assuming that nothing much would develop for the better as Beijing is far from being hard-pressed to roll out major reforms since there is no 'sick economy' to rescue in the first place, economists said.
The main concern for now is for China to at least heed the calls of its trading partners, that is to wean away the domestic economy from exports and to start re-focusing on local consumption.
Experts contend that the move will give China sufficient buffers in the event a major global contraction occurs.
Such adjustments could pull the brakes on China's economy and set in motion likely relaxed economic activities this year, which experts said was last during the first half of 2009.
Aside from possible internal fine tunings, experts pointed out that a slow down is inevitable this year as Chinese products have becomes less attractive, which is especially true in the case of the European market.
Another point of concern is the local housing market, which has seen considerable declines in the past year that developers were nearly resigned to admit of a dim outlook for 2012.
The sliding home prices, however, were partly due to government efforts of averting a bubble and bust scenario that may deeply hurt the general economy, experts said.
With retail and other key sectors in steady ground, gradual declines in the housing market do not worry analysts for now unless they develop into something more alarming.