China’s Economy Still Robust, But Concerns Remain

china economy China’s economy remains very strong chugging along with 6.1% GDP growth in the 1st quarter, but dropped from the 6.8% growth in the 4th quarter 08.  It’s hard to believe that 6.1% is the weakest quarterly growth since quarterly numbers were tracked beginning in 1992.  It certainly indicates the staggering growth of China’s economy over the past decade. 

Credit Suisse analyst Dong Tao views the number positively, but cautioned that China isn’t out of woods as exports remain relatively weak.  Up to this point, the government’s stimulus to spur domestic demand and increasing investments in fixed assets has been been able to offset much of the weakness in exports to the US, Japan and Europe, but it will take a few more quarters to determine if they will be able to continue to do so.  Banks in China have already issued $670 billion in the 1st quarter which is more than 90% of the target for the entire year.

“The government’s rapid easing of credit and rollout of infrastructure projects has bolstered [fixed-asset investment], helping offset decreased investment by export manufacturers and property developers,” J.P. Morgan said

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