China Q4 Growth Slows To 6.8%, Weakest Since 2009

Full-year growth was 6.9%, roughly in line with the government’s target of around 7% but the slowest pace of expansion for China in a quarter of a century.

The quarterly figure also marked the slowest expansion of the Chinese economy since the 2008 global financial crisis. Fourth-quarter GDP came in at 6.8 percent.

Of greater concern to economists, the underlying indicators of the economy show a marked slowdown in business investment, manufacturing, trade and consumer spending, fueling fears over China’s performance for the coming year. To virtually no one’s surprise, 2015 was reportedly subject to the Middle Kingdom’s lowest economic growth rate since 1990.

There was relief in the markets, however, that growth at least matched forecasts, and a growing expectation that more monetary easing measures were imminent, possibly before Lunar New Year holidays in early February.

“We have managed to overcome the difficulties including a slow global economic recovery, faster reforms in the domestic market, and the rate is reasonable in the state of new normal”, Wang said during a briefing, according to Shanghai Daily.

Urban fixed-asset investment continued to taper, expanding 10 per cent year on year, compared with 15.7 per cent in 2014.

Analysts point to a multitude of reasons: a weaker external environment which caused Chinese exports to drop a year ago and a limping property market, a key source of revenue for the government.

Top Chinese leaders held an economic policy meeting on 18 January, a day before the release of the GDP data.

“The stock market jumped partly because of speculation China will introduce incentives such as interest-rate cuts or RRR cuts soon after it released GDP data this morning”, said Zhang Gang, analyst at Central China Securities in Shanghai.

Industrial production – or factory output – expanded 5.9% in December, down from 6% in November.

Having experienced double-digit growth for more than a decade – during which it replaced Japan as the world’s second-biggest economy – China is now going through a painful period of readjustment as growth inevitably slows.

Those results fell short of economists’ expectations, according to a survey by Bloomberg News, which predicted a year-on-year increase in retail sales of 11.3%, while industrial production was projected to expand 6%.

Retail sales rose 10.7 per cent, down from 12 percent registered in 2014.

Tony Nash, chief economist at the Complete Intelligence Consultancy firm, said while it was a setback for the global economy, China’s economy still grew more robustly than most countries.

Data on Monday showed China’s home prices continued to rise in December 2015, adding to signs of improvements in the housing market, which accounts for about 13 per cent of GDP.