China has released its report on 2008 economic performance, which indicates the country's slowest growth rate in seven years. The Chinese government remains optimistic for 2009, but last year's slowdown shows that China is far from immune to the global economic crisis. Alison Klayman reports from Beijing.
A Chinese official announced today that China's economy grew by nine percent in 2008. Although this is China's slowest growth rate since 2001, Commissioner of National Bureau of Statistics Ma Jiantang retains a positive outlook.
Ma says China's economic performance is still well above averages for developed and developing countries, as reported by the International Monetary Fund.
Nine percent annual growth is the fastest rate for any major power in 2008, but represents a four percent drop from China's 2007 rate of economic expansion.
China's fourth-quarter gross domestic product took the most dramatic hit, dropping to less than seven percent growth, following a nine percent GDP in the July-through-September period.
Analysts and the Chinese government generally regard an eight percent growth rate as the minimum required for China to provide enough jobs. The Chinese Academy of Social Sciences is optimistic the economy will grow by eight-point-three percent in 2009.
Yet many predictions for 2009 put China's economic expansion at no more than five to six percent. That would be the slowest growth rate since 1990.
Some of the most promising figures announced Thursday came from fixed-asset investment and retail sales. Investment in assets and property rose 25-point-five percent, to more than two-and-a-half-trillion dollars last year. Retail sales grew 21-and-a-half percent -- almost a five percent increase from the previous year.
To increase consumer confidence, Ma says China is looking to bolster investment in social security and health care.
Ma points to the state council's intention to spend almost 125-billion dollars for health care reform, in the next three years .
He says social programs and retail sales are causes for optimism. Yet decreased orders from abroad and factory closings continue to raise questions about massive unemployment with might provoke social unrest.
China's exports, which had been booming month after month, in recent years, contracted in November and December, as orders fell sharply from ailing American and European economies. Exports in December fell by 2.2 percent compared to the previous year. Industrial output rose almost thirteen percent in 2008, but that figure is 5.6 percent lower than 2007