Chinese economy slows amid slump in demand (VIDEO)
China’s gradual relaxations of controls on the value of the yuan and on capital flows means that the yuan is set to become a major international currency.
China's export-dependent economy grew at its slowest pace in more than two years in the final quarter of 2011, Reuters reported.
Officials from the world's second-largest economy announced today that gross domestic product grew 8.9 percent, after measures were taken to tame inflation and create a buffer from the global debt crisis.
This is the slowest rate of expansion since the second quarter of 2009.
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Although the figures are down from 9.1 percent in the previous quarter, they are still marginally higher than the 8.7 percent economists polled by Reuters had forecast.
Output from Chinese factories and workshops rose by almost 14 percent for 2011, a slower pace than in 2010.
Reduced buying power from the US and Europe has not hit the Chinese economy as hard as expected, with economists describing it as surprisingly resilient.
Adrian Foster, from Rabobank in Hong Kong, told Al Jazeera that China's reduced growth rate was still “pretty robust:"
"The US is growing at around 2 percent and Europe is in a recession – but it will take a little bit of selling to convince the domestic market … China actually lost momentum early in 2011 and going into 2012, we can expected to see growth in the 8 to 9 per cent range, as this is about right."
Analysts say they expect GDP growth in China, one of the fastest-growing economies in recent years, to further slow this year.
China had been looking at ways to slow its growth to more sustainable levels, after the government's stimulus measures – such as curbing lending and pushing up interest rates – created the risk of asset bubbles developing, the BBC reported.
This video of Brian Jackson, an emerging-market strategist at Royal Bank of Canada, explains China's economic state in detail:
