China GDP grows 7.7% in first quarter of 2013


According to the Tencent Financial News, National Bureau of Statistics has just released data showing that in the first quarter of 2013 Chinese GDP grew by 7.7% compared to the same period of 2012, and the 7.7% quarter growth is slightly lower than the 7.9% growth in the fourth quarter of last year. China’s GDP growth rate in the past one year’s time has been running around 7% without breaking the ceiling of 8%.

This morning, the National Bureau of Statistics released the first quarter GDP (gross domestic product) and March macroeconomic data including industrial added value, fixed asset investment, real estate investment, social total retail sales of consumer goods.

Preliminary accounts show that the first quarter GDP reached 11.8855 trillion yuan (US $1.902 trillion), based on the comparable prices, there was an increase of 7.7%. The growth was lowered than the widely expected 8% in the market. Looking at the industries, the primary industrial added value was 742.7 billion yuan, an increase of 3.4%; the secondary industry’s added value was 5.4569 trillion yuan, an increase of 7.8%; the added value in the tertiary industry 5.6859 trillion yuan, an increase of 8.3%. From the chain perspective, the first quarter GDP growth was 1.6%.

Since the first quarter of last year, China’s GDP growth has been running below 8%. China’s GDP in 2012 was more than 51.9 trillion yuan (US $ 8.304) an increase of 7.8%, the lowest growth rate since 1999.

The government work report 2013 had set China’s gross domestic product (GDP) growth target at 7.5% and the report stressed that the GDP data shall not contain any inflated data to achieve stable and rapid economic growth.

Bank Financial Research Center senior macroeconomic analyst Tang Jianwei commented that consumption and industrial production in the first quarter was weaker than market expectation; but investment was relatively strong, export market liquidity is more relaxed, thus a weak recovery trend is expected.

Recently, the National Development Research Institute of Peking University released a forecast report, based on 28 institutions’ comments of the current economic trends, suggested that the overall view if the economy was: “modest economic rebound, policies are prudent to maintain stability”.

Entering the beginning of March 2013, the published economic data were mixed. Among them, the growth of foreign trade was strong with the first quarter export reaching 3.2 trillion yuan (US $512 billion), an increase of 18.4% comared with the same period in 2012; also for the six consecutive months, the PMI has been running in a relatively high level, revealing a moderate upward trend of the domestic economy in first quarter. However, in the first quarter of 2013, the producer price index (PPI) fell by 1.7%, the 13th consecutive month of negative growth; the PMI was 50.5% in the first quarter together with overcapacity in multiple industries show that the economic rebound is still relatively weak.

Compared with the economic data, the financial data for the first quarter were described as “overly heat” with the broad money (M2) balance reaching 103.61 trillion yuan (US $16.58 trillion), an increase of 15.7% in the first quarter compared to the same period last year. Total new loans in the first quarter reached 2.76 trillion yuan (US $ 441.6 billion) and new deposits 6.11 trillion yuan (US $977.6 billion). In March, the new scale of social financing reached a record high of 2.54 trillion yuan (US $406.4 billion), an increase of 700 billion yuan (US $115 billion) compared to the same period last year.

Some experts believe that the effect of the credit expansion may show up in the second and third quarter this year, thus the recovery of the Chinese economy will be more robust in the coming two quarters.

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