Economists have linked the slowdown in economic growth of China with sluggish domestic and external demand, weak investment and excess production capacity.
BEIJING, 19 Jan –, Zhanna Manukyan. The growth rate of China’s GDP in 2015 in annual terms slowed to 6.9% compared to 7.3% in 2014, which is the worst indicator for the last 25 years, according to the National Bureau of statistics of China (NBS).
“According to preliminary data, the gross Domestic product of China in 2015 was 67.67 trillion yuan (about $ 10.3 trillion), which is 6.9% more than last year. In particular, the annual GDP growth in the first quarter was 7%, in the second – 7%, in the third and 6.9% in the fourth – 6,8%,” — said in published on Tuesday a report.
The figures coincided with forecasts of 50 economists surveyed earlier by Reuters.
The end of the fourth quarter was the worst since the first quarter of 2009, when the growth rate of the Chinese economy under the influence of the world global financial crisis has slowed down to 6.2%.
“In a difficult international environment and with increasing pressure, in General, the economy has reached a moderate but stable and healthy development,” the report said. The document also notes that the growth rate of the economy remained in a “reasonable range”. It is noted that in the past year, economic structure has been optimized, reform accelerated, and the quality of life of the people has improved.
“In 2015, the GDP growth was 6.9%. It is necessary to consider in what conditions was achieved. Currently, international trade is slowing down, financial risks are growing, it is impossible that all these factors had no impact on China’s economy. Growth at 6.9% is not low”, — said at a press conference, the head of NRC of China Wang Bao, commenting on the reasons for the slowdown.
According to economists, the slowdown in China’s economic growth due to sluggish domestic and external demand, weak investment, surplus production capacity, which increased the pressure of deflationary forces on the economy.
In March last year, the Chinese government has set the bar for economic growth in 2015 at “around 7%”, height 6.9% overall to meet the authorities of the problem.
Many analysts are quite skeptical of perceived economic statistics from China, doubts about its reliability and validity. Summary data for the provinces of China often exceeded the nationwide level, which has caused suspicion that some local authorities, obsessed with growth, are engaged in postscripts. However, the problem is not only that. Methods that used statistical Bureau of China, were established for the planned economy of the Soviet type. In relation to the modern economy of China, these data collection methods are outdated. However, the Chinese authorities are making efforts to improve the situation: in early September, stature decided to change the method of calculation of quarterly GDP of the country for the purpose of application of international standards and increase the accuracy of the data.
NRC publishes data on GDP growth three times per year: after the estimate is preliminary, and then final confirmation.
The objective for 2016
It is expected that the government will define the limits of economic growth in 2016 at the level of below 6.5%. Chinese President XI Jinping said that the growth rate of China’s economy during the 13th five-year plan (2016-2020) should not be below 6.5% per annum to 2020 to reach its goal of doubling the GDP of 2010 and the doubling of incomes of the population.
In the annual report on the state of China’s economy indicate that the international situation still “remains difficult, internal structural reforms are at a critical stage, when it is necessary to overcome various challenges and solve problems, and the objective on the comprehensive deepening of reforms remains difficult.”
“Next, we must firmly adhere to guidance for the conduct of stable macroeconomic policies, a clear industrial policy, flexible monetary policy, to carry out practical reforms and solid social policies and to focus on structural reform to stimulate policy proposals,” the document says. The authorities hope with these measures to ensure medium-high growth rate of the national economy.
Experts note that while the government in 2016 would rely on fiscal policy to maintain economic growth, the Central Bank of China may need as before to conduct expansionary monetary policy (represented by a decrease in short-term interest rates to stimulate business activity), to soften the impact of structural reforms on the economy.
The Chinese government will announce the expected growth for 2016 in March during the annual session of vsekitajsky meeting of national representatives – the highest legislative body of the country.
China’s economy in the last few years started to gradually slow down the growth, causing concern among experts. The Chinese authorities do not share their pessimism: the economic slowdown in the people’s Republic of China calls a “new normal”, which implies a high-quality, intensive development, rather than rapid, extensive growth.