Chinese dragon loses puff

The recent quarter figures bring China’s overall annual growth rate to 9%, down from 13% in 2007 and the country’s lowest in seven years.The numbers have heightened fears among Australian industry.Many believed the might of the Chinese economy would protect the resources industry from the full force of the global financial crisis, however the latest figures do not bode well for the local mining sector.Already the ailing global economy has triggered widespread job cuts from within the mining industry with mining giant BHP Billiton announcing this week it would slash 6000 jobs worldwide in response to the economic downturn. ABN Amro resources analyst Warren Edney said the China figures were in line with expectations.“It was probably in reality not too bad. It’s grown but not a last year’s rate or the year before.”He said the growth figure was likely fall to 5% over 2009.“We’re still expecting ongoing slowing in the first half and a pick-up in the second half.”The slowdown would likely temper iron ore and thermal coal prices.Meanwhile Finance Minister Lindsay Tanner said the new data from China was a “big problem” for Australia.”Today’s growth figures from China are bad news for jobs in Australia and bad news for economic growth,” he told media yesterday.”They’re worse than market expectations and they confirm that the Chinese boom that has super-charged the Australian economy over the past five to seven years is receding rapidly.”That’s a big problem for Australia. It’s part of a wider picture that is coming to bear throughout the world and is having a very powerful, negative impact on Australia’s short-term economic outlook.”

Send this to a friend