China’s growth slowed more than forecast last quarter to the least in almost three years, prompting economists to predict a rebound as Premier Wen Jiabao loosens policy to counter weak domestic and European demand.
Gross domestic product in the worldâ€™s second-biggest economy expanded 8.1 percent from a year earlier after an 8.9 percent gain in the fourth quarter, the National Bureau of Statistics said in Beijing earlier this morning.
An unexpected surge in March new yuan loans shows the ruling Communist Party is trying to avoid a deeper growth slide amid a once-a-decade power transfer to younger leaders. Pickups in industrial production and retail sales reported today may limit concerns that the world recovery is losing steam after job gains in the U.S. lagged forecasts and Europeâ€™s sovereign-debt crisis threatened to worsen.
â€œThe Chinese economy may be starting to bottom out and possibly will reaccelerate going forward,â€ said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. â€œThe pickup in lending in March and the slight gain in momentum for industrial production and retail sales suggest that growth might pick up in the months ahead.â€
The Shanghai Composite Index pared gains following the report, rising 0.2 percent at the 11:30 a.m. local-time break after advancing as much as 0.5 percent. The MSCI Asia Pacific Index rose to a one-week high and South Koreaâ€™s won gained after a rocket launched by North Korea broke up and fell into the sea.