China Q2 GDP growth 7.6 percent, slowest in 3 years
By Nick Edwards and Kevin Yao
BEIJING (Reuters) - China's economy grew 7.6 percent in the second quarter of 2012 from a year earlier, its slowest pace in three years, confirming expectations of a downward trajectory that leaves full-year growth on course for its softest showing since 1999.
The GDP number released on Friday, which was in line with a Reuters poll, marked the sixth straight quarter of easing growth and left analysts combing a raft of accompanying data to assess whether the second quarter marks the bottom - or an extension - of the downward cycle.
The trajectory of the economy is crucial for investors facing a slowdown not only in China, the world's second-largest economy, but anemic growth across the BRIC grouping of major emerging economies - Brazil, Russia, India and China - which combine as the biggest marginal generators of global growth.
"Overall, this is a soft landing, but we can see that the Chinese economy is undergoing serious pain," said Xianfang Ren, an economist at IHS Global Insight in Beijing.
"I have 80 percent confidence that the economy will pick up in the third quarter as we have been in a slowdown for six consecutive quarters now. However, if the economy does not show an upturn in the next few months, factories will probably have to lay off workers and that will hit employment."
Other data released alongside GDP revealed fixed asset investment growth was 20.4 percent in the year to June versus the 20.1 percent forecast in the benchmark Reuters poll.
Fixed asset investment has been the key driver of economic expansion in China for a decade and is a major risk factor for investors watching its rate of growth ease back from 25 percent plus to around 20 percent on average so far this year - especially as the government's stated aim is to reduce its contribution to growth as it rebalances the economy.
Retail sales in June were up 13.7 percent on a year ago versus May's 13.8 percent and industrial output was weaker than expected, growing 9.5 percent versus expectations of 9.8 percent, while power output was flat. Continued...