China's leaders fear mounting unemployment as a result of the slowdown could trigger unrest [EPA]

According to figures released in Beijing on Thursday, China's economic growth hit its slowest rate in seven years in the last quarter of 2008, bringing the threat of more job losses and possible unrest.

At the same time Japan has announced that its exports in December plunged by 35 per cent – a monthly record - as the threat of global recession cut demand for the country's products.

Meanwhile, statistics released by South Korea show Asia's fourth largest economy saw its second-biggest contraction on record in the last quarter, with GDP falling a seasonally adjusted 5.6 per cent.

The figures, announced by the Bank of Korea, were more than twice as much as economists had expected.

'Fundamentals strong'

According to the latest Chinese government figures, China's economy expanded by 6.8 per cent in the three months to December, down from a 9 per cent gain in the previous three months.

Despite the gloomy data coming out of China, Ma Jiantang, the commissioner of China's National Bureau of Statistics was eager to put a positive spin on the news.

"The fourth quarter did present some grave challenges and difficulties, but they are temporary," he said. "Just like the freezing weather we had this morning, it will not last forever."

Ma said he was confident about the future state of China's economy, saying the "deep-rooted and underlying fundamentals that drive China's growth remain unchanged in 2009."

"A downturn can be a very good time for restructuring the economy," he added.

Declining demand for Chinese exports has forced thousands of factories to close and newly unemployed migrants to stream from coastal manufacturing regions back to their rural hometowns.

The data released on Thursday highlighted the damage being inflicted on Asia as demand for cars, electronics, clothes and other goods evaporates in the US and Europe.

'Steep recession'

Japanese tech giants are feeling the squeeze from plunging demand

In Japan, fresh data showed exports plunging by a record amount.

As with China, which also relies heavily on export manufacturing, recessions in key markets such as the US and European Union have hammered the demand that the Japanese economy relies on for growth.

Underlining the gloom, Japan's giant Sony corporation forecast an operating loss of nearly $3 billion for the 2008/09 business year.

The fortunes of the massive tech manufacturer are traditionally regarded as a litmus test for the overall health of the Japanese economy.

"Clearly our region is really plunging into a steep recession,'' Dariusz Kowalczyk, chief investment strategist for SJS Markets in Hong Kong, told Reuters news agency, commenting on the latest in a raft of dismal figures coming out of Asia.

"We are going through a big slowdown.''

Korea crisis

Korean labour unions have threatened protests against restructuring plans [Reuters]

In South Korea, data released on Thursday confirmed that the economy was facing its biggest crisis since the Asian financial meltdown a decade ago.

Figures showed the South Korean economy shrank in the fourth quarter of 2008 by 3.4 per cent, contracting from the previous year for the first time since the last quarter of 1998.

South Korean manufacturing and exports have crumpled in the face of slumping global demand.

One bright spot on Thursday however came from South Korea's Kia Motors which said that fourth-quarter net profit nearly doubled as sales rose amid weakness in the South Korean currency.

Kia earned 74.8 billion won ($54.7 million) in the three months ended on December 31, the company said in a release, a gain of 97.3 per cent compared with a year earlier.

A weaker won boosts profits of the country's exporters when their overseas sales are converted into local currency and also makes South Korean products cheaper in overseas markets.

Kia exports the majority of its vehicles.

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