Economist: China Slowdown Is Desirable

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China's growth has slowed to its lowest level in nearly three years - but this should be welcomed, an economist has told Sky News.

"I think this is something we should be happy about," Madhur Jha from HSBC (LSE: HSBA.L - news) said.

"We're not seeing a collapse in growth, we are seeing a slowdown in growth and that's something that is desirable because there were real risks and fears of an overheating in China."

The world's second largest economy's gross domestic product (GDP) expanded at 8.1% compared to the first three months of 2011, much lower than expected.

Ms Jha said the gradual decline in growth was the effect of measures taken by Chinese authorities to tighten monetary policy last year.

Despite the slowdown the country's year-on-year growth rate in the final quarter of last year was 8.9%, far higher than many developed nations in the West.

Some analysts say there are further signs of expansion.

"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," Xianfang Ren from IHS Global Insight said.

Investors in Asia appeared to agree - stock markets in Asia closed higher on Friday with Hong Kong's Hang Seng (HKSE: ^HSI - news) and Tokyo's Nikkei (Osaka: ^N225 - news) gaining 1.8% and 1.2% respectively.

But the news impacted European markets, which remained weighed down by concerns over eurozone debt, and the main indices in London, Paris and Frankfurt all lost value.

Even US markets were not spared eurozone concerns, despite strong results from companies in the banking and technology sectors. 

JP Morgan and Google (NasdaqGS: GOOG - news) both reported a 24% rise in revenues in the first quarter of the year.

The economic troubles in the eurozone have already impacted Chinese exports. Global (Chicago Options: ^RJSGTRUSD - news) demand may remain sluggish into mid-year, with weak employment numbers in the US last week reviving concerns over the strength of the recovery in the world's biggest consumer.