China released GDP numbers today which showed growth in the world’s second largest economy slowed down by more than expected in the first quarter. The main reason behind the slowdown was lower exports and a drop in real-estate investment.
GPD expanded at 8.1 percent, which was the least in three years. Forecast was for 8.4 percent growth. The previous number, for the fourth quarter showed a 8.9 percent expansion.
The Shanghai Composite Index was lower after the GDP report. In the currency markets,, the Australian dollar was hit the hardest by the data since China is Australia’s major trading partner, and so a slowing growth might affect demand for the commodity-exporting Australian economy.
However, other data from China were not as bad. March industrial output came in higher than expectations at 11.9 percent versus 11.5 percent forecast, while March retail sales rose 15.2 percent, which was higher than the 15.0 percent forecast.
The bright side is that China’s growth is still above the 7.5 percent target set by the Chinese government. Additionally, compared to the United States and Europe, China is still showing resilient growth and its economy remains a bright spot. China’s GDP numbers are sharply higher in contrast to the US and EU. On an annual basis US GDP was 3 percent in Q4 of 2011, and merely 0.7 percent in the EU.