2013 economic growth stays flat at slow 7.7%
Print Edition
China’s economy last year registered flat growth of 7.7 percent, maintaining its slowest expansion in more than a decade as the government warned of “deep-rooted problems,” including a mountain of local authority debt.
Gross domestic product expansion for the October-December quarter also came in at 7.7 percent, the National Bureau of Statistics said yesterday, from 7.8 percent in the previous three months.
The total gross domestic product last year amounted to 56.88 trillion yuan (US$9.24 trillion).
The output of China’s service sector added 8.3 percent to 26.22 trillion yuan last year, surpassing the production of the manufacturing sector for the first time which rose 7.8 percent to 24.97 trillion yuan.
“China’s economy and society have entered a new phase,” said Niu Li, an expert with the State Information Center.
This is in line with China’s general economic growth and pattern of industrial upgrading, Li told Xinhua news agency.
New reforms in the country should focus on the service sector, especially finance, shipping and logistics, he added.
The agricultural sector edged up 4 percent to 5.69 trillion yuan, according to the statistics bureau.
Industrial production rose 9.7 percent year on year in December, down 0.3 percentage points from November.
Retail sales, a gauge of domestic consumption, gained 13.6 percent to 2.3 trillion yuan last month, slowing from the pace of 13.7 percent in November, the statistics bureau reported.
Fixed-asset investment expanded 19.6 percent last year as a whole, with the pace easing from 19.9 percent in the first 11 months.
The slowdown in the third quarter may deepen this year, according to some analysts.
Zhang Liqun, an analyst with the Development Research Center of the State Council, said downside pressure still exists, citing deep-rooted problems including mounting local government debt and industrial overcapacity, Xinhua reported.
“The country should further promote reforms to release dividends and generate internal driving force of the economy,” Zhang said.
“As the world situation improves, China’s economic growth may pick up in the third and fourth quarter of this year,” he added.
The gentle fall-off in growth was welcomed by most experts as a must-have as China transits to better-quality development.
“On the whole, the Chinese economy is performing well through its adjustment phase,” Brian Jackson, chief China economist at IHS Global Insight, told Reuters.
Concerns that China may sacrifice too much growth in its bid to enact change are unfounded, Jackson said.
Ma Jiantang, head of the statistics bureau, said China will strive to extend 2013’s “stable growth momentum” into 2014, and try to make use of reform to accelerate economic restructuring and improve people’s livelihoods.
China’s 56.9 trillion yuan economy was still very much dependent on investment for growth last year.
In 2013, investment contributed 54.4 percent to the 7.7 percent annual growth, while consumption contributed 50 percent. Net exports played the role of a negative 4.4 percent, according to the statistics bureau.
Ambitious investment by local governments that have racked up some US$3 trillion worth of debt has been at the forefront of China’s investment drive in recent years, a trend that must be checked, Ma said.
“In 2014, I believe reforms will continue to be a key driving forces for economic growth,” he told a news conference.
China pledged to forge ahead with reforms while maintaining stable economic policies. China will stick to a proactive fiscal policy and a prudent monetary policy, according to a statement issued at the Central Economic Work Conference last month.
“This year’s growth outlook largely depends on the sequencing in economic reforms and their near-term impact,” said Zhang Zhiwei, an economist at Nomura. “We are confident that reforms will move along, and we expect the priority areas are administrative reform, financial reform and fiscal reform.”
Deutsche Bank expects China’s growth to accelerate to 8.6 percent this year while RBS thinks it may climb to 8.2 percent.
“We expect China to benefit from improved global growth this year,” Louis Kuijs, an economist at RBS in Hong Kong, told Reuters.
China has yet to announce its economic growth target for 2014. Sources with top think-tanks told Reuters the government will likely stick with its 7.5 percent target.
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