A worker labors at a factory making automobile wheels in Shaoxing city in east China’s Zhejiang province on Monday April, 15, 2013. China’s economic growth slowed unexpectedly in the first three months of the year, fueling concern about the strength of its shaky recovery. (AP Photo) CHINA OUT
BEIJING (AP) — After China reported quarterly economic growth of 7.7 percent this week — far above anemic U.S. and European performance — global markets reacted by falling, wiping billions of dollars off stock prices.
The reason? Growth came in under the 8 percent expected by private sector forecasters who relied on Chinese trade and other data.
The market plunge highlighted complaints about the possible inaccuracy of Beijing’s official data and the intense, possibly excessive importance traders attach to a handful of Chinese economic indicators.
What matters more than a difference of a few tenths of a percentage point in growth from quarter to quarter is whether Chinese leaders are allowing the private sector to flourish by reducing the role of state industry in the economy, said Ben Simpfendorfer, managing director of Silk Road Associates, a consulting firm in Hong Kong.
“There is an obsession with these GDP numbers, and what really matters at this point is reform,” said Simpfendorfer, a former Royal Bank of Scotland economist.
China is watched especially closely because it is a major market for foreign goods from iron ore to smartphones and is relatively healthy, fueling hopes Chinese demand can help Login to read more