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China, US, banks give mixed signs of recovery

(Agencies/chinadaily.com.cn)
Updated: 2009-04-17 07:55

WASHINGTON - Hopes that China's slowest quarter on record could mark a bottom to the global crisis were echoed by JPMorgan's better-than-expected results on Thursday, but weak European output and US housing data emphasized the downturn's grip.

Video News: China′s GDP grows 6.1% in Q1 Related readings: Fed survey finds faint signs of hope Economy slows to 6.1 percent in Q1 Economy 'better than expected' Decline in exports slows in March Economy on track for recovery Chinese economy picks up strength Chinese more bullish on economy Economy to bottom out in 2009: WB

China, the world's third-largest economy, started this year with its weakest quarter since records began in 1992 as the 6.1 percent growth rate fell below the 6.8 percent level of the prior quarter.

But analysts saw optimistic signs in quarter-on-quarter growth, which they estimated in the range of 5.3-6.2 percent.

"It's still an OK number which shows China is bottoming out," said Calyon senior economist Sebastien Barbe, adding that "the policy response -- a lot of bank lending and investment by state-owned companies -- is helping contain the slowdown."

Industrial output rose 5.1 percent year on year in the first three months, much of the growth achieved in March, which witnessed 8.3 percent growth, the NBS said.

Retail sales rose 15.9 percent in real terms, up 3.6 percentage points from a year earlier.

Fixed assets investment jumped 28.8 percent year-on-year, 4.2 percentage points higher than the growth in the same period last year.

China's economy has taken on several "positive changes", and performed "better than expected," since the government announced a series of measures to boost the economy, including a US$586 billion stimulus package and plans to revitalize 10 key industries, spokesman for the National Bureau of Statistics (NBS) Li Xiaochao told a press conference on Thursday.

Mixed News from US Financial Sector

As the broader financial sector struggles in the United States, General Growth Properties Inc, the second-largest US mall owner, underscored the trouble caused by frozen lending by filing for Chapter 11 bankruptcy protection.

In the biggest real estate failure in US history, the company said its core business was solid but that bankruptcy was the only way it could refinance debt.

The leading stock exchange inched up as the financial sector rebounded following upbeat results by US investment bank Goldman Sachs. [Agencies]

The International Monetary Fund said the global recession is likely to be unusually long and severe, with recovery sluggish since the crisis took root in reckless bank lending to the US housing market.

The IMF called for aggressive and coordinated monetary and fiscal policies, saying restoring confidence in the financial sector was important for a recovery to take hold.

But a top US Federal Reserve official said the recession in the world's largest economy should end by mid-year with growth slowly picking up, adding there were "encouraging signs that support cautious optimism."

"I do not expect a strong recovery," Federal Reserve Bank of Atlanta President Dennis Lockhart said in prepared remarks, The current contraction would "give way to slow and tentative growth as early as the third quarter," he said.

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