China's economic growth slows

China's economy isn't growing as expected.

After finishing 2012 with its lowest annual economic growth rate (7.8 percent) since 1999, the first three months of 2013 didn't show any signs of improvement.

China's GDP grew by 7.7 percent in first quarter of 2013, state media reports. But officials didn't seem concerned saying that growth rates between 7.4 percent and 7.9 percent were seen as normal.

Still, the slowed growth came as a surprise, The New York Times reports:

Analysts had widely expected China’s economy, the world’s second biggest after the United States, to have picked up more steam during the first months of the year, as a tide of credit flowed into the economy, and government-mandated investment in infrastructure projects picked up.

Contributing to the slowed GDP growth is industrial output growing 9.5 percent, down from 11.6 percent a year ago.

Rising debt is also a growing problem. Just last week Fitch Ratings downgraded China's long-term local currency, saying that total credit was 198 percent of total GDP at the end of last year. That's an increase from 125 percent in 2008 and a growing concern for China's economic growth.

[Via New York Times, Xinhua]

Photo: Flickr/michaelhenley

This post was originally published on Smartplanet.com

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