Updated: 2013-01-18 12:44
By Li Jiabao, China Daily
China’s gross domestic product grew by 7.8 percent in 2012 to 51.93 trillion yuan ($8.35 trillion), Ma Jiantang, head of the National Bureau of Statistics told a news conference on Friday.
The slow pace of growth was a result of a challenging international situation, as well as long-term factors, Ma said.
He added that moderate growth between 7 and 8 percent, compared with the double-digit growth over the past decades, was in accordance with China’s economic change rule.
GDP growth in the last quarter of 2012 rebounded to 7.9 percent after it had slowed down for seven successive quarters to 7.4 percent in the third quarter, Ma said.
The first sector increased 4.5 percent year-on-year in 2012 while the second rose 8.1 percent. The third sector also expanded 8.1 percent, according to the bureau.
China’s overall grain output recorded the ninth consecutive increase to reach 589.57 million tons last year, up 3.2 percent on 2011. Meanwhile, industrial value-added output in 2012 increased 10 percent year-on-year, 3.9 percentage points lower than in 2011. Fixed assets investment in 2012 increased 20.6 percent from a year earlier, down 3.4 percentage point from 2011, Ma said.
“China is in a cyclical recovery and we can see that the recovery will continue into the first and second quarters (of this year), but what happens after that is quite uncertain,” Yao Wei, China economist with Societe Generale SA, said before the report was released.
“What happens to the property market is the biggest upside and downside risk, while the rise in non-bank financing may lead regulators to tighten. We can’t simply assume policy will get easier from now on.”
China’s growth will pick up from 7.9 percent to 8.4 percent in 2013, said Kaushik Basu, chief economist with the World Bank at a news briefing in Washington earlier this week for the release of the bank’s Global Economic Prospects report.
“China is growing at a phenomenal rate, right from 1978 or 1980, and you can’t grow at 10 percent for more than a couple of decades,” said Basu.
“China has done it for 30 years and this has been expected in China, and it is expected by us that China will continue to grow very rapidly, but it will probably come down from these great highs.”
China’s target for annual GDP growth was 7.5 percent in 2012 and will remain the same for 2013, according to sources.
The fourth-quarter recovery has been attributed to an acceleration in industrial output in October and November and a jump in exports in December, although some analysts believe last month’s sharp expansion in trade could be a blip.
China’s exports grew 14.1 percent last month compared with a year earlier, racing past market expectations of 4 percent and November’s 2.9 percent pace.
In the absence of any major stimulus, Beijing has quickened the pace of infrastructure investment and provided incentives to encourage consumer spending on energy-efficient home appliances to support growth.
Chinese leaders, while warning that the global economic malaise may last longer than expected, have promised to maintain policy “fine tuning”, Beijing’s mantra throughout last year, in 2013 to keep growth stable.
Economic stability is seen as vital for the new leaders Xi Jinping and Li Keqiang in China as they have pledged to push forward structural reforms to sustain long-term growth.
The central bank has paused from its monetary easing since July after two interest-rate cuts and three reductions in lenders’ reserve requirements starting in November 2011. At the same time, the government has accelerated investment-project approvals, trimmed fees for exporters and increased spending on infrastructure.
The investment is helping companies including China Railway Group Ltd., which said this week that it won 11 contracts valued at 29.8 billion yuan ($4.8 billion) to build urban railways, bridges and other infrastructure.
Bloomberg, Reuters and Zhang Yuwei in New York contributed to this story.