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China 2014 growth at 24-year low

By Wang Yanlin | January 20, 2015, Tuesday | Online Edition

CHINA'S economy expanded 7.4 percent from a year earlier in 2014, the slowest pace in 24 years as the country's growth entered a phase of "new normal," the National Bureau of Statistics said today.

The gross domestic product amounted to 63.6 trillion yuan (US$10.4 trillion) last year, and the growth was largely in line with the official target of "around 7.5 percent."

The production was led by the services sector, which gained 8.1 percent to 30.7 trillion yuan. The manufacturing sector added 7.3 percent to 27.1 trillion yuan, while the agriculture rose 4.1 percent to 5.8 trillion yuan.

In terms of quarterly expansion, the world's second-largest economy increased 7.3 percent in the fourth and third quarters, following the rise of 7.5 percent in the second quarter and 7.4 percent in the first three months.

Ma Jiantang, head of the statistics bureau, said China has fulfilled the official target against the background of huge complexity and challenges in both global and domestic markets.

"We have managed to overcome the difficulties including a slow global economic recovery, faster reforms in the domestic market and our transition to the state of new normal," Ma said at a media briefing. "The rate of 7.4 percent is hard-earned and is within a reasonable growth range... The growth target also needs to be adapted to the new normal when the country is changing growth gears."

The Chinese authorities have proclaimed the "new normal" of slower expansion but with higher quality under deepened reforms.

Last year, China was beset by problems ranging from weakness in manufacturing and trade, to financial worries over rising debt levels and falling real estate prices which have sent shockwaves through the property sector.

To stress the achievement, Ma said the growth was well accompanied by the inflation rate of 2 percent last year and the stable employment.

Other indicators showed that China's industrial production increased 8.3 percent last year. Factories reported an expansion of 7.9 percent in December, up from the four-month low of 7.2 percent in November.

Fixed-asset investment grew 15.7 percent to 50.2 trillion yuan in 2014, and capital flowing into the property rose 10.5 percent, indicating the sector is cooling as the authorities had hoped.

Retail sales, a broad gauge of domestic consumption, accelerated 12 percent to 26.2 trillion yuan last year. One spotlight fell on the online spending, which surged 49.7 percent to 2.7 trillion yuan.

Zhou Hao, an economist at Australia & New Zealand Banking Group Ltd, said the actual economic outturn was still above market expectation, as the services sector outperformed, as well as the year-end surprises coming from the recovering housing sales and the stock market rally.

"The contribution from services to GDP growth was 3.8 percentage points in 2014, compared with around 3 percentage points from manufacturing, reflecting an undergoing structural change," Zhou said.

"Looking ahead, Chinese authorities will likely tolerate a slower growth rate at around 7 percent under the framework of new normal economy and will strike a balance among social, environmental and economic targets," Zhou said.

He noted China may lower the growth target to 7 percent this year and he expected China's economy may grow 6.8 percent in 2015.

Economy


 

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