NY Times In China, Sobering Signs of Slower Growth By _KEITH BRADSHER_ (http://topics.nytimes.com/top/reference/timestopics/people/b/keith_bradsher/index.html?inline=nyt-per) Published: March 5, 2012
GUANGZHOU, China — The nights are a little darker now here in the main metropolis of southeastern China, at the center of one of the country’s largest export hubs. It is but one sign of the slightly dimmer economic outlook for China that Premier Wen Jiabao forecast on Monday, when he reduced the government’s minimum growth target for 2012 to what would be, if growth fell that far, the lowest rate in more than two decades. Construction sites across Guangzhou used to be floodlit, so that work could continue through the night on the forests of new residential and office towers reaching toward the stars. But now, during a nationwide real estate downturn, builders are not starting projects or scrambling to finish ones already under way, so there is little need for night-work illumination. The Chinese economy, after nearly three decades of rapid, almost uninterrupted growth, seems to be settling down to a still strong but less blistering pace. But some sectors are struggling, including exports and luxury residential real estate construction. Premier Wen said in his annual report to the National People’s Congress on Monday morning in Beijing that the government had scaled its economic growth target back to 7.5 percent this year, down from the 8 percent that Beijing has set as a minimum growth target in recent years. If growth does come in at only 7.5 percent, it will be the slowest pace in 22 years. As Mr. Wen delivered his lengthy report, broadcast nationally and watched on countless TV sets in diners and shops here in Guangzhou, the mood at construction sites and factory districts seemed more downbeat than usual. Shop clerks in a wholesale market complained about the scarcity of customers. At a factory gate, workers said that few jobs were available except at the minimum wage. And at an employment office, the jobless fretted that even if they found work, they would have little hope of buying apartments typically priced beyond their means. Su Weizhong and three other clerks late Monday morning stood at a desk with little to do at a plumbing supplies store in the wholesale market. “A year ago, there were people in every shop, looking and asking about the prices,” Mr. Su said. “Projects are finishing, but there are absolutely no new projects this year.” With China having been the world’s main growth engine in recent years, a slowdown is hardly welcome news for the global economy. Neither is the prospect of a restive population — a continual worry for Beijing, if it cannot meet the aspirations of a rising middle class. In some ways, though, the United States could actually benefit from slower Chinese growth, many economists believe. China’s appetite for commodities has helped push up prices for everything from oil to iron ore. But those price pressures could ease, as China shifts toward an emphasis on slower but more sustainable economic expansion. And while less rapid growth could dampen China’s demand for imports, that would have little impact on most American businesses. Exports to China represented just 0.6 percent of the United States’ economic output last year. At its peak, in 2007, China’s economy grew at an annual pace of 14.2 percent. As recently as 2010, it was 10.4 percent. Now, though, the government is trying to guide the economy toward a minimum average annual growth of 7 percent through 2015. Slower growth partly reflects a government attempt to shift the economy more toward personal consumption, with less emphasis on exports and investment in big domestic construction and infrastructure projects. But government officials have given a series of signals since mid-February that growth may be slowing more than they intended. The central bank on Feb. 18 gave permission to state-controlled commercial banks to lend a larger share of their assets. The next week the commerce ministry announced that it was drafting plans to increase tax rebates for exporters, as financial troubles have weakened demand in Europe, China’s largest export market. The commerce ministry also said it was looking for ways to reverse a slump in foreign investment this winter from Europe and the United States -- Centroids: The Center of the Radical Centrist Community <[email protected]> Google Group: http://groups.google.com/group/RadicalCentrism Radical Centrism website and blog: http://RadicalCentrism.org
