China’s gross domestic product (GDP) expanded at its slowest pace for 24 years in 2014, growing 7.4 per cent, just shy of the government target of around 7.5 per cent for the year and slightly ahead of market expectations.
Economists releasing the figures spoke about the “new normal”, about getting the world’s second largest economy on a more sustainable track while tackling a housing slowdown, softening domestic demand and weak global recovery.
Last year, the country’s gross domestic product reached 63.65 trillion yuan (€8.84 trillion). Growth in the fourth quarter came in at 7.3 per cent, flat with the rate seen in the third.
It’s the slowest rate of expansion in the Chinese economy since 1990, when it had to deal with international sanctions after the crackdown on the democracy protests in Tiananmen Square.
Even if this is the “new normal”, it will keep pressure on Beijing to take more aggressive steps to avoid a sharper downturn.
In 2014, China’s industrial output grew 8.3 per cent, down from the 9.7 per cent growth seen in 2013, while growth of China’s fixed-asset investment slowed to 15.7 per cent. Retail sales went up 12 per cent to 26.24 trillion yuan (€3.64 trillion) according to the National Bureau of Statistics – a good sign private consumption is increasing.
Xinhua commentator Wu Xia wrote how the headlines about slower growth testified "to a worldwide fervour for speed".
“Some will not hesitate to tag the pace, the slowest in 24 years, as a sign that the world’s second-largest economy is losing steam. But as has been repeatedly proven, such gloom-mongering will only make a mockery of its believers,” wrote Wu.
The International Monetary Fund (IMF) has cut its forecasts for China's growth this year and next as the global economic rebound plateaus, although it believes the decline in oil prices will mean China is less reliant on stimulus. The Washington-based fund expects mainland GDP growth to slow to 6.8 per cent in 2015 and to 6.3 per cent in 2016.
