Corrected: China set to post single-digit growth in 2008 - UOB

20 October 2008 13:21  [Source: ICIS news]

Correction: In the ICIS news story headlined "China set to post single-digit growth in 2008 - UOB" dated 20 October 2008, please read in the second paragraph …  to yuan (CNY) 20.16 trillion ($2.95 trillion) … instead of … yuan (CNY) 20.16 bn ($2.95bn) …. A corrected story follows.

SINGAPORE (ICIS news)--Five years of double-digit growth could come to an end for China in 2008 on tighter credit measures and lower export volumes to the US, a United Overseas Bank official said on Monday as slower growth for the first nine months was revealed.

In the first nine months of the year, the country’s GDP grew 9.9%  to yuan (CNY) 20.16 trillion ($2.95 trillion), down from the 12.2% expansion rate for the first three quarters of 2007, according to China’s National Bureau of Statistics.

Exports grew 22.3% from the year-earlier period to more than $1,000bn but the growth rate was 4.8 percentage points lower compared last year’s levels, it said.

The turbulent financial markets and the global economic slowdown were expected to affect the performance of the Chinese economy looking ahead, the government agency said.

Third-quarter GDP growth decelerated to a slower-than-expected 9.0% from 10.1% in the second.

UOB economist Suan Teck Kin expects China’s growth to further slow down to 8.7% in the fourth quarter.

“That would bring us 9.6% growth for the full year, the first time in five years that we will see a single-digit growth,” said Suan.

The country’s manufacturing sector has started to feel the pinch of declining external demand and tighter credit conditions in China, he said.

Industrial production grew 11.4% in September from a year ago, half of what it used to be, said Suan. For January to September, industrial production expanded 15.2%, down 3.3 percentage points from the same period a year earlier.

“Fortunately for China, investment spending and consumer spending have been quite steady this year so these will be the key growth pillars for China,” said Suan.

Nine-month fixed asset investments grew 27% to CNY11,624bn from a year ago, while wholesale and retail sales jumped 22% to CNY6,557bn.

“We expect these two to continue their growth momentum into next year,” Suan said.

($1 = CNY6.84)

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By: Pearl Bantillo
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