China acknowledges difficulty in maintaining stable growth

BEIJING--China's gross domestic product for the October-December 2011 quarter grew only 8.9 percent year on year, the lowest figure in 10 quarters.

"Both the international and domestic economic climates are very complicated and challenging," Ma Jiantang, commissioner of the National Bureau of Statistics of China, said at a news conference on Jan. 17. "It is becoming increasingly difficult to maintain stable and rapid economic growth."

It is projected that the GDP growth rate for the full year of 2012 will dip to an 11-year low of less than 9 percent because exports are losing steam amid the European debt crisis. The economic slowdown in China, one of the biggest growth engines among emerging economies, is expected to take a toll on the global economy.

Ma said he had been told by a European Union statistics official that the Eurozone could have two consecutive quarters of negative growth from the last three months of 2011 through to the first three months of 2012.

"The external conditions for our economic management this year are extremely harsh," he said.

China's exports increased 20.3 percent year on year in 2011, down from 31.3 percent in 2010. In 2012, exports are expected to grow by only about 10 percent.

Investment in real estate development, an engine of China's growth, grew 27.9 percent year on year in 2011, down 5.3 percentage points from 2010.

Beijing, however, plans to continue regulating new housing sales to curb soaring prices, a source of strong discontent among the public.

The GDP growth rate for the full year of 2011 went down to 9.2 percent, falling below the 10-percent mark for the first time in two years.

"To a certain extent, we were hoping that (the growth rate) hovered around that level," Ma said, indicating he believed that growth that relies on investment and export is not sustainable.

Beijing is planning to set a target growth rate for 2012 at around 7-8 percent.

"(China's) fiscal and money policies still have some leeway in terms of means of operations," Ma said in a recent magazine article.

This suggests he is prepared to take stimulus measures, including further easing of money and tax cuts, in case of an unexpectedly steep slowdown.