April 13th, 2012
09:16 AM GMT
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Beijing (CNN) – Chinese first quarter GDP data showed a fall in year-on-year growth to 8.1% for the first quarter of the year, compared to 8.9% in the last quarter.

This relatively sharp slowdown in growth will clearly increase concerns about a hard landing in the near-term.

However, many analysts expect that growth will stabilize and recover modestly over the rest of the year as external conditions improve and China's domestic policy is fine-tuned.

Some analysts still forecast annual GDP growth of around 8% for 2012–even though Chinese officials have set a relatively modest annual target of 7.5%. That will be a significant drop from last year's 9.2% annual growth rate.

China's goal is to modulate the speed of growth by tapping on the brake to slow down without hard landing.

In his "state of the nation" speech at the annual session of China's legislature, Premier Wen Jiabao said the goal is slower but "more sustainable and efficient" economic growth.

Premier Wen also set inflation target at 4% and pledged to create nine million new jobs in towns and cities. He spoke of boosting domestic consumption, increasing spending on social services and raising incomes, as well as expanding consumer credit. The shift calls from more domestic consumption instead of relying on investment and exports for economic growth.

"We aim to promote steady and robust economic development, keep prices stable, and guard against financial risks by keeping the total money and credit supply at an appropriate level, and taking a cautious and flexible approach," he said.

But experts say China faces nagging risks, including eurozone's debt crisis, domestic property sector, government debt and growing social tension.

Chinese officials hope to maintain economic stability this year – a crucial year of transition for China’s top leaders as both Premier Wen and President Hu Jintao finish their last year in office.

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Filed under: BusinessChina

soundoff (23 Responses)
  1. James stevens

    All those lights, and yet people will backstab you at the drop of a hat.

    April 13, 2012 at 9:35 am |
  2. hachimada

    It would be crazy to think that China will sustain 9% growth forever. As the size the economy grows, the growth rate will inevitably reduced. 7-8% should be considered "good" rather than "tragic".

    April 13, 2012 at 10:07 am |
  3. Halwits

    Undoubtedly China is one of the biggest growing economies of the world.

    Send Rakhi to India

    April 13, 2012 at 11:23 am |
  4. farmer58

    I wish ! but II am not opitimistic it can reach even 7.9% increassing

    April 14, 2012 at 1:56 am |
  5. CCCP

    I'm dumping my China stock, just to be on the safe side.

    April 14, 2012 at 2:45 am |
  6. Johan S

    They need to ensure real estate prices don't soar, by granting housing permits easily. The biggest hindrance to quality of life is when you have high real estate prices. It's just money wasted. The government should not fix prices, but it can definitely help reduce real estate prices by granting building permits and allowing investment.

    April 14, 2012 at 5:05 am |
  7. BB


    April 14, 2012 at 1:25 pm |
  8. chain

    You don‘t konow China,unless you live with ordinary beings for a long time.Most of your opinion towards China are ridiculous.

    April 14, 2012 at 4:55 pm |
  9. redflag


    April 14, 2012 at 5:21 pm |

    well spoken guys

    April 14, 2012 at 7:40 pm |
  11. Mitch

    The Chinese officials will find out that it's really hard to engineer a soft landing. They already spent their bullets after the 2008 financial crisis – the massive stimulus payed for building large ghost cities in the middle of nowhere. With investment / GDP ratio of over 40% the chinese economy has to either keep growing super-fast or crash soon. I believe the latter is more likely.

    April 15, 2012 at 1:03 am |
  12. Mitch

    By the way, why use Shanghai's pic if you are writing from Beijing? :)


    April 15, 2012 at 1:06 am |
  13. Emil

    China is falling down.

    April 15, 2012 at 4:56 am |
  14. sameh

    learn english for free by video

    April 16, 2012 at 12:56 am |
  15. Raymond

    It is funny to see so called professionals to describe a 8% growth as 'crash landing'. Meantime, most countries are happy to have a 2-4% growth. Instead of trying to get news headline, how about the proper way of describing China's economy is still flying, although at a slower speed. At its current size, it is hard to maintain a constant 6%-8% annual growth.

    Couple of years ago most people are concerned with a slower growth because of possible social unrest due to unemployment. Nowadays it is apparent that most people were wrong. There are jobs in Guangdong province left unfilled because most people like to work close to their homes. Local governments have adopted official policy to double the salary within five years to promote domestic consumption.

    April 16, 2012 at 3:27 am |
  16. chenxl1211

    China is just a developing country!

    April 18, 2012 at 3:16 pm |
  17. fueson

    My wife and i both are bachelors,we work hard six days in a week ,but after a moth,just 800 dollar left。we are Chinese people。

    April 18, 2012 at 5:04 pm |
  18. R

    This story is from Beijing, yet the beautiful photo is of Shanghai's night skyline across the Bund towards Pudong.
    CNN, couldn't you find a similar photo of Beijing?

    April 18, 2012 at 8:37 pm |
  19. Shields

    To fueson: you are lucky to have 800 dollars left every month. Most Americans live from paycheck to paycheck and have nothing left after they pay their bills.

    April 19, 2012 at 2:14 am |
  20. Fate

    China is going to the dead end as economy will fall sharply and social turmoil will follow for the corruption and jobless

    April 23, 2012 at 1:05 am |
  21. Maikel

    Its like you read my mind! You seem to know so much about this, like you wrote the book in it or something. I think that you could do with a few pics to drive the maessge home a little bit, but instead of that, this is fantastic blog. A great read. I'll definitely be back.

    May 15, 2012 at 1:45 am |
  22. hotel in beijing,beijing hotels,hotel at beijing,beijing inn

    certainly like your website but you need to test the spelling on quite a few of your posts. Several of them are rife with spelling issues and I find it very bothersome to inform the reality however I'll surely come again again.

    May 24, 2012 at 8:23 pm |
  23. Amit Shah

    Yaa i am agree with Johan S, The government should not fix prices, but it can definitely help reduce real estate prices.

    Send Rakhi Gifts to India

    July 24, 2012 at 7:17 am |

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