China’s Economy Grows 6.8%, Slowest Pace in 7 Years

China’s economy expanded at the slowest pace in seven years as the global recession dragged down exports, increasing pressure for more government spending and lower interest rates to buoy growth.

Gross domestic product grew 6.8 percent in the fourth quarter from a year earlier, after a 9 percent gain in the previous three months, the statistics bureau said in Beijing today. It’s an astonishingly steep slowdown.

The yuan today, traded at 6.8362 against the dollar in Shanghai from 6.8378 yesterday. The CSI 300 Index of stocks rose 0.4 percent, taking its gain this year to about 11 percent.

The central bank may cut the key one-year lending rate by as much as 81 basis points to 4.5 percent by the middle of the year, after 2.16 percentage points of reductions since September, said Paul Cavey, an economist with Macquarie Securities in Hong Kong. Also. Bank reserve requirements will also decline.