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