China economic growth edged down to 6.8 percent last quarter

The figure was in line with market expectations, but the fourth-quarter growth of 6.8 per cent was weaker than analysts’ estimates.

China had targeted 7 per cent expansion in 2015 even as it looks to transform itself into a consumption-led growth engine switching from the investment and export-led growth pursued so far.

The slowdown has already destabilised China’s stock market a year ago which also had negative effect in the world markets.

At the opening ceremony for the Asian Infrastructure Investment Bank on Saturday, Chinese Premier Li Keqiang said that China’s economy grew about 7 per cent in 2015, with services accounting for half of GDP.

“Given movements in the stock market, I expect we are likely to get a rate cut at any time ahead of Chinese New Year [8 February] regardless”, said Eamonn Sheridan, Forexlive’s chief Asia-Pacific currency analyst.

But the unexpectedly sharp decline over the past two years prompted fears of a politically unsafe spike in job losses.

The upshot is that while the official GDP figures shouldn’t be taken at face value, growth does appear to have been broadly stable last quarter and the December data, although mixed, don’t suggest that China is now entering a deeper economic crisis. For 2015, growth slowed to 6.9%, the smallest gain since at least 1990 and down from 2014’s 7.3%.

China’s top leadership has signalled in recent months it may allow some additional slowness as they tackle delicate tasks such as reducing excess capacity, but nothing that could threaten President Xi Jinping’s goal of at least 6.5 percent growth through 2020. That’s lower than 6.9 percent noted in the third quarter.

“The global situation remains complex”, said Wang Bao’an, commissioner of the National Bureau of Statistics, at a news conference.

Retail sales growth also decelerated, coming in at an annual rate of 11.1% against expectations for an increase of 11.3%.

After expanding by 6.2% in the year to November, growth in industrial production is forecast to slow to 6%.

Looking ahead, we think it makes sense to focus on the monthly data for December in order to gauge the economy’s current momentum.

Real growth adjusted for inflation in 2015 was higher at 2.8 percent due to softer construction material prices, compared with 9.9 percent in 2014.

As part of the government efforts, China opened up its service sector wider to overseas investors a year ago by relaxing a number of investment restrictions.