China’s economic growth appears to have slowed significantly at the start of the year, raising questions about the government’s ability to hit its expansion targets without exacerbating strains on the financial system. Despite the impact of the Lunar New Year, this decline is still considered as a big slide by economists. China’s Premier Li Keqiang said last year that the country could grow at a more modest 7.2% and still generate enough jobs to keep unemployment down and avert social unrest. Some observers say China should allow growth to slow as it transitions away from an economy dependent on credit-fueled investment to one in which higher levels of consumption play a greater role. Activity in China’s factories shrank again in February, a preliminary private survey found on Thursday, reinforcing concerns of a minor slowdown in the economy and spooking markets across the region. In spite of the concern express by many observers, the very strong trade data for January suggests a positive note on the Chinese manufacturing outlook.

(Wall Street Journal, The Economic Times, February 20; Reuters, February 19, 2014)