China: Economic activity picks up in the last quarter of 2012
January 18, 2013
In the fourth quarter, GDP grew 7.9% over the same period the year before. The print was above the 7.4% rise observed in the third quarter, which had represented the slowest growth rate seen since Q1 2009, and slightly overshot the 7.8% rise expected by last month's FocusEconomics Consensus Forecast. In the full year 2012, GDP rose 7.8% (2011: +9.3%), which marks the lowest annual growth rate observed since 1999. That said, economic growth in 2012 came broadly in line with last month's Consensus Forecast projections that had GDP increasing 7.7%.
Although the National Bureau of Statistics does not provide a breakdown of GDP by expenditure, additional data suggest that both private consumption and investment accelerated at the end of 2012. Urban fixed-asset investment growth, which includes capital and construction investment, expanded an accumulated 20.6% in nominal terms in the full year 2012 (Q1-Q3 2012: +20.5% year-on-year), partially reflecting government efforts to support economic growth via infrastructure projects. In addition, private consumption appears to have gained some momentum, with retail sales adding a nominal 14.9% in the fourth quarter, which is above the 13.5% rise observed in the third. In addition, net exports probably increased their contribution to overall growth in the fourth quarter, as exports outpaced imports.
Economic activity from the production side showed that growth in the industrial sector remained stable in the final months of the year, expanding 8.1% in the full year 2012 (Q1-Q3: +8.1% yoy), whereas services improved marginally (Q1-Q3: +7.9% yoy; 2012: +8.1% yoy). Meanwhile, growth in the primary sector rose to 4.5% (Q1-Q3: +4.2% yoy).
A quarter-on-quarter analysis, however, does not fully corroborate the acceleration suggested by annual figures, as GDP rose a seasonally adjusted 2.0% in the fourth quarter, slightly below the 2.1% expansion recorded in the third.