Last Update: Dec 22, 2008

Growth slipped to 9 percent in Q3 of 2008. Down from 11.5 percent in the same period of 2007. It was the slowest growth rate in more than 5 years.

Foreign Direct Investment (FDI)

Foreign companies invested 86.4 billion U.S. dollars in the country for the first eleven months, a 26.3 percent gain compared to the same period last year.

However, FDI in November, totaled 5.3 billion U.S. dollars, fell 36.5 percent compared to the same month a year earlier.

Fixed-asset Investment

Fixed-asset investment from apartments to factories in urban areas climbed 26.8 percent in the first 11 months from a year earlier to 12.76 trillion yuan ($1.9 trillion). Down from the 27.2 percent gain through October.

Interest Rates

China Central Bank cut its one-year benchmark lending rate a 108 basis points to 5.58% on November 27. It was the fourth cut this year and  the largest reduction since the late 90's.

Producer Price Index (PPI)

The PPI growth in November was just 2 percent. Down sharply from 6.6 percent in October. The PPI in August was 10.1 percent.

Consumer Price Index (CPI)

Consumer inflation dropped to 2.4% annually in November, down from 4.0% in October.

Factory Output

Factory output expanded just 5.4 percent in the year to November, the worst figure on record.

Purchasing Managers' Index

The purchasing managers' index in November was 38.8%, sharp fall from 44.6% in October.

Imports

Import fell 17.9 percent from in the first 11 months from a year earlier.

Exports

Exports dropped 2.2 percent in November, to 11.9 billion U.S. dollars.

Property Market

Home sales felt 20.6 percent in the first 11 months from a year earlier. Overall property sales dropped 19.8 percent.

Spending growth fro real-estate development rose 22.7 percent in the first 11 months. Cooled from 24.6 percent gain through October.

Planned spending on investment projects increased 5.4 percent to 7.75 trillion yuan in the first 11 months. Through October, the gain was 3.2 percent.

Retail Sales

Retail sales grew 20.8% year-on-year in November, down from 22% in October.

Stock Market

The Shanghai Composite Index closed on Dec 19 at 2015.69 points. The index has been down 60% since the beginning of the year.

Unemployment

Unemployment rate in urban areas is 4.0%. Rural unemployment rate is 9.4%.

Economic Stimulus Package

To boost domestic consumption, the Chinese government announced on November 9 a fiscal stimulus package worth 4 trillion Yuan (about $586 billion) over the next two years.

The initiative will inject funds into 10 sectors - health care, education, low-income housing, environment protection, schemes to promote technological innovation, transportation and other infrastructure projects.

About 400 billion Yuan ($58.6 billion) of the package would be disbursed by the end of 2008.

Industry Specific Measures

The National Development and Reform Commission (NDRC) is in the process of devising industry-specific measures to shore up the country's 9 key sectors such as steel, shipbuilding, and auto.

Money Supply

The China State Council announced on Dec 13 that the country aims to increase its money supply by 17 percent in 2009, a substantial rise from 15 percent in the year to October.

The cabinet said it would give banks more flexibility on the minimum allowable lending rates they can charge, and it could loosen other rules to give them more leeway in making lending decisions.

The State Council called on banks to provide more credit to companies with sound fundamentals and to offer refinancing to such firms if they hit short-term cash flow problems.

It also told them to lend more in support of investment projects in line with the government's priorities, such as high technology, environmental technology and rural development, while limiting their loans to industries such as the processing trade, which Beijing has been trying to discourage.

Less Dependence on Exports

At the annual Central Economic Work Conference that ended on December 10, the government called for expanding domestic demand and to maintain "fast-paced" economic growth without depending heavily on exports.

Tax Cuts

The government has announced a tax reduction on home sales to boost the slumping property market. Sale profits, rather than prices, will now be taxed.

The government has proposed in December that it may raise the personal income tax exemption threshold to anyone making 3,000 yuan (about $438) a month. 60 percent of Chinese people make less than 3,000 yuan a month. The current threshold for paying income tax is 2,000 yuan a month.

Fuel Prices

The government has announced in mid Dec a 14% cut in gasoline prices, 18% drop in diesel prices and nearly 1/3 cut in jet fuel.

Consumer Price Index (CPI)

The National Development and Reform Commission (NDRC) has set the CPI target for 2009 at 3 to 4.8%.

Interest Rates

The governor of the People's Bank of China (PBOC) said on December 16 that the central bank may cut interest rates further until the middle of 2009, although rate decisions will depend on the CPI.

Gross Domestic Product (GDP)

The Chinese government on Dec 16 lowered its 2009 economic growth target to 8 percent.

Dominique Strauss-Kahn, the Managing Director of the IMF said China will probably grow at 5 or 6 percent next year.

The World Bank has predicted China's economy will grow 7.5 percent next year, the slowest in 19 years.

The Royal Bank of Scotland slashed its forecast for 2009 gross domestic product growth to 5 percent, from 8 percent.

IMF chief Dominique Strauss-Kahn said in December it could cut its 2009 China growth forecast to around 5 percent from 8.5 percent.

Morgan Stanley Asia has forecasted China's baseline GDP growth to be around 7.5 percent in 2009.

The Asian Development Bank (ADB) in December lowered its forecast for China's annual economic growth in 2009 to 8.2 percent.

JPMorgan Chase & Co has, in December, revised its forecast of China's GDP growth in 2009 to 7.8 percent from 8 percent previously.

Deutsche Bank slashed its forecast for China's GDP growth rate in 2009 from 7.6 percent to 7.0 percent.

Goldman Sachs cut its China's 2009 GDP forecast from 7.5 percent to 6.0 percent.

Merrill Lynch said on Dec 15 it has cut its 2009 China GDP growth forecast to 8.0 percent from 8.6 percent.

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