China’s GDP growth dips; shift on track GDP year-on-year growth rate

China Daily (Canada) - - ACROSS AMERICAS - By CHEN JIA in Bei­jing and PAUL WELITZKIN in New York

China will con­tinue to ex­pe­ri­ence an eco­nomic slow­down, and ma­jor chal­lenges still have to be met, fore­cast­ers said on Tues­day.

How­ever, a hard land­ing ap­pears un­likely, they said.

The Na­tional Bureau of Sta­tis­tics re­ported that eco­nomic growth fell to a 25-year low of 6.9 per­cent last year, down from 7.3 per­cent in 2014. GDP grew by 6.8 per­cent in the fourth quar­ter, down from 6.9 per­cent in the third and 7 per­cent in the first two quar­ters last year.

“For the govern­ment, man­ag­ing a soft land­ing with­out trig­ger­ing a rise in un­em­ploy­ment or fi­nan­cial dis­tress, and fos­ter­ing new sources of growth through struc­tural re­form and coun­ter­cycli­cal eco­nomic poli­cies are chal­leng­ing tasks,” said Zhu Haibin, chief China econ­o­mist at JPMor­gan Chase & Co.

Yi­cai.com, the web­site of the Chi­nese-lan­guage China Busi­ness News, said China is en­ter­ing the “6 per­cent era”.

Ex­ports and in­dus­try, par­tic­u­larly heavy in­dus­try, are no longer the main en­gines to drive the na­tion’s growth, the bureau said. Govern­ment-led in­vest­ment in pub­lic in­fra­struc­ture, the man­u­fac­tur­ing of more high-value-added elec­tronic sys­tems, and e-com­merce are the new lead­ers of the econ­omy.

The bureau said that last year the ser­vice sec­tor con­trib­uted an un­prece­dented 50.5 per­cent of GDP growth, com­pared with 48.1 per­cent in 2014. In con­trast, the man­u­fac­tur­ing sec­tor con­trib­uted 40.5 per­cent, down from 47.1 per­cent a year ear­lier.

“I ex­pect Chi­nese lead­ers to en­gage in some form of stim­u­lus this year given weaker growth, par­tic­u­larly in man­u­fac­tur­ing,” Meg Lund­sager, pub­lic pol­icy fel­low at the Wil­son Cen­ter in Wash­ing­ton, told China Daily. “Ideally, pol­icy changes would sup­port more house­hold con­sump­tion.”

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