China posted a first-quarter GDP increase of only 7.7%, against expectations of closer to 8%. It is not entirely clear whether the drop was due to lower demand for goods and services among China’s huge middle class or because of slack demand from overseas. It is worth noting that the data from the People’s Republic is often questioned as to its accuracy.
It is entirely possible that very low demand from EU nations, battered by recession, unemployment and the erosive effects of austerity, could have been part of the cause. The Japanese economy, the world’s third largest, has also been troubled.
According to MarketWatch:
Kim Eng Securities strategist Andrew Sullivan said the numbers were disappointing, but cited global factors and the official change in China’s leadership during the quarter.
“The slowdown in GDP should maybe be expected from the global slowdown and the fact that we haven’t seen the new government pull the trigger on major spending. I still [think] those will come in the second half [of 2013], once the government has established itself,” he wrote following the data release.
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