Preliminary data released by the National Bureau of Statistics (NBS) showed that China’s first quarter GDP grew at 7 per cent. In the previous quarter, GDP grew by 7.3 per cent. In the first quarter of 2009, the country’s economic growth slowed to 6.6 per cent, mainly due to the loss of millions of migrant worker’s jobs. Although growth is at a 6-year low, the quarterly data beat the expected 6.9 per cent that analysts had predicted. "The economy faces rather big downward pressures and we cannot rule out the possibility of sub-7 percent in the first quarter," Hwabao Trust economist Nie Wen predicted earlier. The Chinese economy has been showing signs of slowing. Export data released earlier in the week showed that exports had contracted almost 15 per cent in March compared to a year earlier.
Chinese government officials have noted that the slowdown was expected and will likely remain the status quo as the country transitions from an export oriented economy to a consumer-based economy. “We expected the fall in economic growth,” said NBS spokesman Sheng Laiyun. “As the economy enters the ‘new normal’, the drop in growth rate is good for structural adjustment and transformation.” One key factor inhibiting the Chinese economy is sluggish global demand. Another factor is tepid consumer inflation mixed with persisting factory deflation. Despite the slowdown, many economists believe the Chinese government has enough monetary tools to adequately deal with slower growth. "We expect that the data releases this week will prompt enhanced fiscal and monetary support for the growth agenda, and that policy response packages are ready to go," said a PRC Macro Advisers analytical report.