BEIJING—China's economic growth slowed unexpectedly in the first quarter, raising concerns that a recovery that started in the second half of last year is already losing steam.
With the recovery in the U.S. economy still weak, and problems in Cyprus underscoring Europe's lingering debt issues, disappointing growth in China could cast a pall over the global investment outlook.
"The new government has concentrated more on raising the quality of economic growth," said Sheng Laiyun, spokesman for China's National Bureau of Statistics. He added that "7.7% is not a low growth rate given the global and domestic situation, and it's good for companies' restructuring and industrial upgrading."
The economy showed further signs of slowing at the end of the quarter. Industrial output growth decelerated to 8.9% year-on-year in March, down from 9.9% in February. Retail sales also disappointed, with growth at 12.6% year-on-year in March, suggesting cautious households are being slow to support the government's goal of raising domestic consumption.
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What will happen to the global economy if China's GDP continues to fall? Is the government responding correctly? And if not, what kinds of policies should they be using? #thoughts?
I think that China's GDP is low right now, but not low enough to be in panic mode. I think that people in China need to spend more to increase consumer consumption and GDP overtime.
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