China recovery loses steam; Google chief wary of mini drones; World Bank cuts East Asia growth forecast; Indians lose confidence in gold

1 China recovery loses steam (Bettina Wassener in The New York Times) The Chinese economic recovery lost some of its momentum during the first quarter of this year, official data released on Monday showed, surprising analysts who had expected growth to accelerate on the back of ample credit, strong infrastructure spending and firm exports.

The economy expanded by just 7.7% during the first three months of the year, compared with a year earlier, short of the 8% that economists had projected, and slower than during the previous three months, when gross domestic product rose 7.9% year-on-year. Disappointing industrial output data for March also underlined the fading momentum. Year-on-year growth dropped to 8.9%, the lowest pace of expansion since August 2012, when fears of a “hard landing” in China were widespread.

The surprisingly poor data raised concerns among some analysts that the slowdown could intensify later in the year, due the effects of recent government measures aimed at curbing property price rises and tempering risks from the growth of lending outside of the banking system. Chinese authorities on Monday played down the slowing growth.

Analysts had widely expected China’s economy, the world’s second biggest after the US, to have picked up more steam during the first months of the year, as a tide of credit flowed into the economy, and government-mandated investment in infrastructure projects picked up. In fact, the growing scale of credit has begun to worry an increasing number of analysts, who warn that the resulting buildup of debt bears substantial risks, including asset price bubbles and potentially destabilizing defaults.

2 Google chief wary of mini drones (BBC) The influential head of Google, Eric Schmidt, has called for civilian drone technology to be regulated, warning about privacy and security concerns. Cheap miniature versions of the unmanned aircraft used by the military could fall into the wrong hands, he told the UK's Guardian newspaper.

Quarrelling neighbours, he suggested, might end up buzzing each other with private surveillance drones. He also warned of the risk of terrorists using the new technology. Warning of mini-drones' potential as a terrorist weapon, he said: "I'm not going to pass judgment on whether armies should exist, but I would prefer to not spread and democratise the ability to fight war to every single human being." "It's got to be regulated... It's one thing for governments, who have some legitimacy in what they're doing, but have other people doing it... it's not going to happen."

Small drones, such as flying cameras, are already available worldwide, and non-military surveillance were recently introduced to track poachers in the remote Indian state of Assam. The US and Israel have led the way in recent years in using drones as weapons of war as well as for surveillance.

3 World Bank cuts East Asia growth forecast (Khaleej Times) The World Bank has scaled back slightly its 2013 growth forecasts for emerging East Asia and warned about possible over-heating in the region’s larger economies, but the global lender said the Bank of Japan’s sweeping monetary expansion should provide a fillip to developing countries.

Japan’s efforts to stimulate its economy through monetary easing is likely to be “mostly good” for developing Asian economies such as Thailand and the Philippines, which produce components for Japanese exporters, the World Bank said. The Bank of Japan on April 4 stunned markets by unveiling a monetary expansion campaign with plans to inject about $1.4 trillion into the economy over two years to break a deflationary cycle and end two decades of stagnation. The BOJ’s radical monetary plan, which even eclipsed the US Federal Reserve’s massive quantitative easing program, has caused worries about a wall of money moving into emerging markets and other economies in search of higher returns, potentially stoking inflation and asset bubbles.

Overall, the World Bank expects developing East Asia to grow by 7.8% this year, below its December estimate of 7.9% but faster than last year’s 7.5%. The World Bank tempered its more benign outlook about conditions in the West with a call for Asian governments to start reining in the supportive monetary and fiscal policies that had been adopted in the aftermath of the financial crisis, echoing concerns raised by the Asian Development Bank last week.

4 Indians lose confidence in gold (Biman Mukherji in The Wall Street Journal) Indians are losing confidence in gold because of a recent slump in price, Bombay Bullion Association President Mohit Khamboj has said. Gold may hit $1,380 an ounce in a couple of days, Mr. Khamboj said. At 0241 GMT spot gold was trading at $1,438.70 a troy ounce compared with records above $1,900/ounce reached in September 2011.

However, the domestic wedding season starting this month may see some taking advantage of lower prices, Mr. Khamboj said. China's slower-than-expected 1Q growth has weighed on sentiment, too. Rumors of large sell orders from banks have contributed to broad-based pessimism, traders say. India is the world's largest consumer of gold.