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China's economy expands 7.8% in 2012, slowest since 1999

Reuters  Beijing, January 18, 2013
First Published: 23:14 IST(18/1/2013) | Last Updated: 23:15 IST(18/1/2013)

China's economy grew at its slowest pace in 13 years in 2012, though a year-end spurt supported by infrastructure spending and a jump in trade signalled the foundation for a stable growth path.


Evidence of a burgeoning recovery in exports, stronger than expected industrial output and retail sales, together with robust fixed asset investment, all indicated that Beijing's pro-growth policy mix has gained sufficient traction to underpin a revival without yet igniting inflationary risks.

Year-on-year growth of 7.9% in the fourth quarter beat a consensus forecast of 7.8% and snapped a streak of seven consecutive quarters of slowdown.

The performance was at the upper end of the 7-8% rate economists reckon is needed to deliver on reforms essential to China's long-term development after three decades of red-hot, double-digit growth.

Full year growth of 7.8% was just ahead of analyst expectation of 7.7% and, although the weakest since 1999, comfortably ahead of the government's 7.5% target, which just months ago seemed to be in jeopardy.

Meanwhile, the Gini coefficient, which reflects the wealth gap between rich and poor, was at 0.474 level for China in 2012 - well above the warning levels, a report has said.

The index has been retreating gradually since hitting a peak of 0.491 in 2008, dropping to 0.49 in 2009, 0.481 in 2010 and 0.477 in 2011, against the warning level of 0.4 set by the UN, Xinhua quoted Ma Jiantang, director of the National Bureau of Statistics as saying today.

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