KEY POINTS:
China's economy may have expanded at its slowest pace in seven years in the fourth quarter as exports collapsed, undermining growth across Asia.
Gross domestic product grew 6.8 per cent from a year earlier, according to the median estimate of 12 economists surveyed by Bloomberg News, down from 9 per cent in the previous three months.
The data is due to be released this week.
Plummeting Chinese demand for parts and materials for exports is driving Taiwan and South Korea closer to recessions and worsening Japan's economic slump.
After vaulting past Germany to become the world's third-biggest economy in 2007, China may this year face its first drop in shipments since at least 1990.
"China's era of hyper-growth is coming to a sudden, very disruptive end," said Kevin Lai, an economist with the Daiwa Institute of Research in Hong Kong.
"China's imports are slumping dramatically and the rest of Asia relies on it very significantly."
The slowdown from the previous three months would be the sharpest since quarterly data began in 1994. The pace compares with 13 per cent growth in 2007.
Easing inflation, which the survey estimates fell to 1.6 per cent last month from a decade high of 8.7 per cent last February, gives room for more interest-rate cuts.
The key one-year lending rate is 5.3 per cent after five reductions from September.
China may add to the 4 trillion yuan stimulus package announced in November and limit the yuan's gains against the dollar to aid exporters.
As well as the export slowdown, slumps in stocks and property are undermining consumer confidence and growth.
"Exports are not going to recover any time soon and the property market is struggling," said Ben Simpfendorfer, an economist with Royal Bank of Scotland in Hong Kong.
"More easing is needed because demand won't return in a hurry."
Exports will decline 6 per cent this year, down from a 17.2 per cent gain in 2007, Fitch Ratings said.
Among the biggest losers from China's waning demand are Taiwan, which shipped almost 36 per cent of its exports to China in 2007; South Korea, which sent 25 per cent; and Japan, which shipped 1 per cent, says UBS AG.
Goldman Sachs Group forecasts the South Korean economy will contract this year, its first recession since the 1997-1998 Asian financial crisis.
Taiwan probably slipped into a recession in the fourth quarter, its Government said.
China's imports from Taiwan fell 44.3 per cent last month.
Shipments from Korea declined 30 per cent and those from Japan dropped by 15.4 per cent. Exports were 2.8 per cent lower, the biggest decline in almost a decade.
At home, as many as four million migrant workers lost their jobs last year as factories closed and that figure is likely to jump a further five million this year, says Credit Suisse.
- BLOOMBERG
