China on Monday lowered last year’s growth figure, already the weakest in a quarter-century, days after worries about slowing expansion in the world’s second-largest economy caused global stock market havoc.
China is a main driver of the world economy, its biggest trader in goods and a key market for commodities, so its troubles can have worldwide repercussions.
Gross domestic product stood at 63.6 trillion yuan ($10 trillion) last year, down by 32.4 billion yuan from the initial estimate, the bureau said in a statement on its website.
Officials acknowledged that China’s own stock exchanges had seen “bubbles”, after a spectacular debt-fuelled rally was followed by a painful bust which huge interventions have failed to reverse, but said the turbulence was coming to an end. The National Bureau of Statistics said that after a “preliminary confirmation” it reduced the 2014 gross domestic product (GDP) growth figure to 7.3 per cent from the 7.4 per cent announced in January. A final confirmation could come in January 2016, it added.
The new number remains the lowest since 1990, when expansion plummeted to 3.9 per cent. After decades of double-digit expansion, authorities are attempting a tricky rebalancing — from an investment- and export-led economic model to one where domestic consumer demand drives slower but more sustainable growth.
Finance minister Lou Jiwei told a G20 meeting of finance ministers and central bank governors in Ankara at the weekend that the economy had entered a “new normal”.
Growth was expected to remain at “around seven per cent” — the government’s 2015 target -- he said, adding: “The situation may sustain for four to five years.” Chinese growth slowed from last year in the first two quarters of 2015, reaching 7 per cent in both periods. Nomura International analyst Wendy Chen said GDP correction was largely related to service sectors, which were key to the overall transition but had lower growth than earlier figures showed.
“This means China’s economic structure did not improve as well as expected.” The downward GDP revision comes with many analysts having long expressed doubts over whether official statistics are manipulated for propaganda or other purposes.
Adding up provincial GDP figures regularly produces a larger total than the official one for the country as a whole. Scepticism was heightened when this year's second-quarter GDP came out in line with the government’s full-year target despite a series of downbeat indicators during the period.
Even Premier Li Keqiang reportedly once expressed doubts,telling the then-US ambassador in 2007 that some Chinese data were “man-made” and thus unreliable.