Revival Policies Seem to Work for China but Growth Slows in the First Quarter
China has embraced certain economic revival policies that appeared to be working as March economic figures came out. But the economy still slowed down further in the very first three months of 2016.
On Friday, the National Bureau of Statistics said, the gross domestic product (GDP) of China expanded by 6.7percent in Q1 compared to one year ago. That was down from 6.8 percent reported gain in the earlier quarter.
The growth figure matched the average 6.7percent increase estimated by 14 economists and marked Chinas' slowest first quarter growth since 2009. At that time the economy grew 6.2percent compared to one year earlier period.
Some confidence was added to the markets last month as there was a marked rise in Chinas' property price in key cities. The currency of China and capital outflow from the country also posed less volatility compared to earlier months. The country's foreign-exchange reserves also grew in March for the first time in the last five months.
China has introduced six interest-rate cuts since November 2014 and other measures including reductions in reserves which the banks are supposed to maintain along with streamlining huge number of infrastructure projects which was focused on giving a stable foothold to stop an economic downturn. Factories in China still continue to produce more goods than in demand and that is also adding to the economy's slow progress.