AFP

BEIJING CHINAsaid on Friday its economy grew by 8.1 percent in the first three months of 2012, its slowest pace in nearly three years, but analysts forecast a pick-up in the second half of 2012.

The figure was well below the 8.9 percent growth recorded in the last quarter of 2011 and marked the fifth consecutive quarterly slowdown, piling further pressure on Beijing to loosen its monetary policy.

However, analysts predicted the world’s second-largest economy would avoid a hard landing, with growth expected to rebound towards the end of the year as Europe’s economic outlook brightens and existing loosening measures kick in.

“Green shoots have sprung up in many sectors, convincing us that the current slowdown looks more and more like a slow consolidation, rather than a precipitous downturn like we saw in 2008-09,” said Xianfang Ren, economist with IHS Global Insight.

The first quarter “might turn out to be the weakest quarter for China in the current down cycle, as signs of stabilisation have already emerged on both domestic and external demand sides”.

Further evidence of a slowdown in China’s export-driven economy came with data showing output from its millions of factories and workshops rose at a much slower pace in the first three months of this year. Industrial output was up 11.6 percent in the first quarter, compared with growth of 15.7 percent a year earlier, the National Bureau of Statistics (NBS) said.

Spokesman Sheng Laiyun said there was now “enormous” pressure on exports as China’s vast manufacturing sector is hit by falling demand in crisishit Europe, the country’s main export market.

“The global situation in the first quarter is complex... the pressure on exports growth is enormous,” he told reporters.

Over the past few months Beijing has pledged to “finetune” policy to prevent a hard landing for the economy, which could trigger widespread job losses and spark social unrest. China’s annual growth slowed to 9.2 percent last year from 10.4 percent in 2010, prompting the government to cut its economic growth target to 7.5 percent this year, in an official acknowledgement that the export-driven economy is slowing.

“China’s economic and social development still faces many difficulties and challenges,” said a statement issued by the State Council, or cabinet, following a meeting convened by Premier Wen Jiabao.

“The international financial crisis has not ended and the fundamental problems of the eurozone debt crisis have still not been resolved,” the meeting concluded.