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"Implementation has been problematic but I think the government is trying to make some progress," said Barclays Capital economist Yiping Huang. A renewed setback for China could send out global shock waves. It would hurt demand for U.S. and European technology and consumer goods, industrial components from Asian neighbors and iron ore, copper, oil and other commodities from Australia, Brazil and Africa. Societe Generale warned this month that China still faces a small chance of a "hard landing" with growth dropping below 6 percent
-- a dangerously low level. Possible triggers: A 2008-style drop in trade or a financial shock if Beijing responds to public frustration with high housing costs by over tightening controls meant to cool surging prices. "The room for error and the likelihood of nasty unintended consequences is not negligible," said Societe General economist Wei Yao in a report. Stronger quarterly growth was widely expected after earlier data showed retail sales, factory output and other indicators rising. In December, retail sales growth accelerated to 15.2 percent over a year earlier, up from the previous month's 14.9 percent, the National Bureau of Statistics reported. Factory output growth rose to 10.3 percent from November's 10.1 percent. Manufacturing grew for a third month in December but at a slow pace, an industry group, the China Federation for Logistics and Purchasing, reported earlier. New orders overall grew but export orders dropped slightly. Consumer inflation also has ticked up, possibly complicating moves to sustain a recovery if necessary with interest rate cuts or higher spending. Inflation spiked to a six-month high of 2.5 percent in December after a freezing winter pushed up vegetable prices by nearly 50 percent in some areas. Officials say inflation so far is limited to vegetables, but analysts say pressure for other prices to rise is increasing. Higher inflation could hamper Beijing's ability to support a recovery with interest rate cuts or more spending for fear of fueling a politically dangerous price spiral. Consumer prices are especially sensitive in a society where the poorest families spend up to half their monthly incomes on food. ___ National Bureau of Statistics of China (in Chinese):
http://www.stats.gov.cn/
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