China spotting: Providing fresh impetus to growth

China has announced new measures aimed at bolstering its economic growth. These include plans to build railways, roads and airports along the Yangtze River — which connects China’s less developed inland provinces to Shanghai. Meanwhile, China’s central bank said it will encourage banks to lend more to exporters to boost shipments. The moves, the latest in a series of steps taken in recent weeks, come amid concerns over a slowdown in China’s economy — the world’s second-largest.

China’s economy expanded by 7.4 per cent in the January-to-March period, from a year ago, down from 7.7 per cent growth in the final quarter of last year. After years of robust expansion, China has seen its growth rate slow in recent years, in part due to a slowdown in demand for its exports from key markets. In an attempt to sustain a high growth rate, and to rebalance its economy, China has been looking to boost domestic consumption.

However, there have been concerns that as China tries to move away from an export-led growth model, growth may slow down further. Data released earlier this month showed that China’s imports declined 1.6 per cent in May, from a year earlier, underlining fears that domestic demand may not be picking up as fast as policymakers had hoped. At the same time, China’s exports have also been under pressure in recent months. Even though shipments rose 7 per cent in May, they had increased just 0.9 per cent in April and declined sharply in March and February.
http://goo.gl/hHyO2v