China's growth at 3-year low: Can it still play an economic hero's role?
China's economic growth fell to a three-year low, and although analysts said a recovery may be in sight, it will probably be too weak to pull the world out of its slump.business Updated: Jul 13, 2012 22:17 IST
China's economic growth fell to a three-year low, and although analysts said a recovery may be in sight, it will probably be too weak to pull the world out of its slump.
The world's second-largest economy grew by 7.6% over a year earlier in the three months ended June, its slowest since early 2009 during the global crisis, data showed on Friday.
Analysts pointed to strong bank lending as a sign of a possible recovery in the second half, but slower growth in retail sales and factory output left them uncertain how fast or how vigorously the economy will improve.
"The soft landing is still on track largely as expected, but the rebound may be slightly more drawn out," said Moody's economist Alaistair Chan in a report.
The data dampen hopes China can make up for weak demand from debt-crippled Europe and the US, which is struggling with a sluggish recovery.
"It is not certain whether or not there will be a strong upward rebound. But at least the economic growth rate will stop coming down," said economist Xiao Li at Industrial Bank in Shanghai.
The impact of lower Chinese demand could fall hardest on Asian economies that supply industrial components to its vast manufacturing industry, as well as exporters of oil, iron ore and other commodities such as Australia and African nations.
Chinese imports of steel, copper and oil have declined by volume over a year ago.
The economy "will begin to improve meaningfully from August onwards," said JP Morgan economists in a report.