Morning briefing: China's growth slows, help for Greek banks
By Ariana Eunjung Cha
The news overnight from Europe and Asia was disappointing, though not surprising:
*China's statistics bureau reported that its economic expansion was slowing, as the effects of its massive stimulus eased and the government introduced measures to cool property speculation. Economic growth increased 10.3 percent in the second quarter compared to the same period in 2009. In the first quarter of this year, in contrast, China's economic growith was up a whopping 11.9 percent over the first three months of 2009. Economists surveyed by Bloomberg had expected 10.5 percent growth in the second quarter, so the data fell slightly short of predictions.
*In Greece, the unemployment rate rose to 11.9 percent in April, up from 11.6 percent in March, but there was good news about the country's debt troubles. Greece's private Piraeus Bank offered to buy stakes in state-controlled ATEbank and Hellenic Postbank for $890.5 million.
*The economic data announced in China, combined with a weaker economic forecast by the Federal Reserve on Wednesday, sent world markets--crude oil, copper, rubber, and stocks--downwards. Japan's Nikkei closed down 1.1 percent, Hong Kong's Hang Seng retreated 1.5 percent, and other benchmarks across Asia in South Korea, India and New Zealand also closed lower.
*Hu Xiaolian, deputy governor of the People's Bank of China, reiterated that China believes that a more flexible exchange rate is "a fundamental need for economic restructuring and optimizing resources allocation... [It will] reduce China's trade imbalance and excessive reliance on exports, and help sustain economic growth by relying more on domestic demand." World pressure for the yuan to rise has increased since the economic crisis began, and China has allowed the yuan to strengthen 0.8 percent versus the dollar since June 19, when the central bank said it would end its peg to the dollar.
Ariana Eunjung Cha
July 15, 2010; 7:33 AM ET
Categories: Federal Reserve , International Economics , Trade , U.S. Economy
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