The Sydney Morning Herald reports,

China, the world’s second biggest economy, posted growth of 8.9 per cent in the last three months of 2011, beating economist forecasts even as export demand moderated.

China’s growth for the quarter, though, slowed for a fifth consecutive quarter as the government reversed some of its stimulus policies in a bid to keep inflation in check. The 8.9 per cent pace is also the slowest expansion since the June quarter of 2009 and compared with the 8.7 per cent pace tipped by analysts.

After the announcement the Shanghai Composite initially sold off on expectations that monetary easing would be less than originally expected before bouncing nicely.

All eyes  are now on how Chinese factories react after the holiday.  Will they or won’t they rehire workers returning from the New Year.  Stay tuned.