Plummeting Chinese demand for parts and materials for exports is reverberating across Asia and the Pacific, driving Taiwan, South Korea and Australia closer to recessions and worsening Japan’s slump. Premier Wen Jiabao said this week that the government must work urgently this quarter to reverse the slowdown and maintain social stability amid a very grim” outlook for jobs.
The 9 percent pace of growth for 2008 compares with the 13 percent expansion that pushed China past Germany in 2007 to become the world’s third-biggest economy.
Urban fixed-asset investment rose 26.1 percent last year, the data showed, compared with a 26.8 percent increase in the first 11 months.
China has pressured state-owned banks to increase lending, unveiled a 4 trillion yuan ($585 billion) stimulus package, reduced export taxes and is adding support for 10 key industries, including tax cuts and subsidies for steel and autos.
Besides trimming China’s contribution to global growth, which was estimated by the International Monetary Fund at 19.5 percent in 2007, the slowdown is hurting Asia, where South Korea reported today a bigger-then-forecast economic contraction.
Taiwan’s exports to China plunged 44 percent in December, Korea’s dropped 30 percent, and those from Australia declined 25 percent, Chinese figures show. Japan reported today that its shipments to China plummeted 35.5 percent.
China’s own exports declined by the most since 1999, triggering factory closures and job cuts.
The government has signaled that the official urban jobless rate, which doesn’t include migrant workers, may jump to as high as 4.6 percent in 2009, which would be the worst in almost 30 years.