China reports slower GDP growth at 7.6%
This picture taken on July 12, 2012 shows a Chinese worker monitoring a thread-making machine at a factory in Jinjiang, southeast China's Fujian province.
Jeff Horwich: Economic growth numbers from China did not fail to live up to the hype. By which I mean, they were as bad as everyone expected. China's GDP growth slowed in the latest quarter to 7.6 percent -- the slowest in three years.
BBC Correspondent Martin Patience is in Beijing to talk the numbers through with us. Hello, Martin.
Martin Patience: Good morning.
Horwich: So, what gets the blame -- if you had to pick a couple of factors -- for the slowdown?
Patience: Well, I think there is two real reasons. China is the biggest exporter in the world therefore, we’re seeing a downturn; the economic turmoil in Europe; we’re seeing slow growth in America. These are the two biggest markets for Chinese exporters and if consumers in Europe and America aren’t buying Chinese goods then the knock-on effects are felt here, of course.
And then, I think a second point, the Chinese authorities aren’t trying to stimulate domestic consumption -- that’s basically getting the Chinese consumer to buy more Chinese products. Why do they want to do that? Well, they want to be less reliant on exports for economic growth.
Horwich: So, it’s kind of funny, as you say China relies on us for growth, the last few years, of course, much of world has really leaned on China to be the growth engine for the rest of the planet. Does this most recent quarters’ growth change that?
Patience: Well no, that’s what’s interesting. Although, you have to look at what countries rely on China for growth. Countries like America want to see more British and American companies selling goods to China in order to boost growth back home. Certainly in the short term, I think it will be other countries -- it’s the countries involved in commodities -- that could be hit if this slowdown continues.
Horwich: Let's talk about the number itself. This is true everywhere, but especially in China I've seen people describe the GDP figures as coming out of a "black box." Is there any sense that even these numbers we’re talking about today might be too rosy?
Patience: Well, it’s often difficult to get a clear answer particularly when it comes to Chinese data. And when you speak to economist in the country many of them are split on this issue. Certainly some economists are saying that actually they think the slowdown is more serious than the Chinese authorities are letting on. Some of the figures I’ve heard are about 6.5 percent.
Horwich: The BBC’s Martin Patience in Beijing, thank you very much.
Patience: Thank you very much.
Horwich: Just as a little more context: China's "slow" quarter -- 7.6 percent -- is still fast by most any other standard. As a comparison, first quarter growth in the US economy was 1.9 percent.