News / Economy

China's Economic Growth Slows

China GDP growth, 2010 - 2013
China GDP growth, 2010 - 2013
VOA News
New economic data from China show the country’s growth slowing for the second consecutive quarter much as expected.  
Official figures from the country’s statistics bureau indicate the economy grew 7.5 percent in the April to June period, compared to the same period a year earlier.

“China's economy has maintained a steady growth,” said Sheng Laiyuan, spokesman for China's National Bureau of Statistics, “The GDP totaled 24.8 trillion yuan ($4 trillion U.S.) in the first six months, up 7.6 percent from a year earlier. GDP grew 7.7 percent in the first quarter and 7.5 percent in the second."

Other growth indicators - such as factory output and investment - also weakened compared to a year ago.

Sheng Laiyuan said that the figures are all within the country's economic targets, but added that China's economic conditions are still “complex and changeable.”

The continuing slowdown comes as Chinese leaders push through measures aimed at rebalancing the country's economy, diminishing its reliance on manufacturing for exports and government investment in core industries.

Shaun Rein, managing director at the China Market Research Group, says that the latest data show China’s economy is still overly reliant in investments in physical assets, such as real estate and infrastructure.

“Fixed asset investment grew 20.1 percent year over year, that is still far too high, we should be more on the 18 to 19 percent range,” he said.

As Economy Slows, China Tries to Rebalance Industry
 
Rein says that more of the economy needs to depend on consumer spending and the latest figures show that may be happening. Retails sales grew 13.3 percent in the first half of 2013 - an indication that consumers are starting to account for a bigger slice of GDP growth.

“You still see continued consumer confidence, continued spending going forward,” he says, “but it's not an easy switch and there will be pains in the economy going forward as we make that shift.”

The Chinese government has been enacting a series of policies to curb speculation in sectors like real estate, construction and banking, which traditionally accounted for much of the Asian giant’s economic growth.

Sheng Laiyuan said that such interventions will prove essential in the long term.

“Some measures, including the intensified property-tightening campaign, new rules to curb misuse of public funds and the exit of some previous stimulus policies, will inevitably have some impact on growth in the short term, but they will benefit our economy in the long run," he said during Monday's news conference.
Further Signs of Slowing Ahead

In a research note published on Monday, Nomura economists Zhiwei Zhang and Wendy Chen said that growth remains on track to achieve government's target of 7.5 percent for 2013.

But the economists revised down their GDP growth forecast for next year, from a previously forecasted 7.5 percent to 6.9 percent.

Zhang says that a decline in the workforce, as well as delays in structural reforms are contributing factors in the decision to lower estimate growth for 2014.

“The working-age population dropped in 2012 - the first time in at least 20 years - and this is a really big deal, because it changed the supply of labor and make the labor market much tighter then before and push up wage growth, and hurt China comparatively particularly in the export sector,” Zhang said in a conference call on Monday.

At the same time, Zhang says, policymakers have overlooked the development of private companies.

“The government tried in the past five years to encourage private investment and open up monopolies in the protected sectors, but there is very little action to follow up with those guidelines,” Zhang said.

In recent months, senior government officials have stressed the need to achieve a more balanced development, and upgrade the quality and efficiency of Chinese industries.

Last week, China's Finance Minister Lou Jiwei said the country's economy could expand less than the government's target in 2013, and added that in the future China could tolerate growth as low as 6.5 percent.

You May Like

US Imposes Sanctions on Alleged Honduran Drug Gang

Treasury department alleges Los Valles group is responsible for smuggling tens of thousands of kilograms of cocaine into US each month More

At 91, Marvel Creator Stan Lee Continues to Expand his Universe

Company's chief emeritus hopes to interest new generation of children in superheroes of all shapes and sizes by publishing content across multiple media platforms More

Photogallery New Drug Protects Against Virus in Ebola Family

Study by researchers at University of Texas Medical Branch, Tekmira Pharmaceuticals is first looking at drug's effectiveness after onset of symptoms More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
African Media Tries to Educate Public About Ebolai
X
George Putic
August 20, 2014 8:57 PM
While the Ebola epidemic continues to claim lives in West Africa, information technology specialists, together with radio and TV reporters, are battling misinformation and prejudice about the disease - using social media to educate the public about the deadly virus. VOA’s George Putic has more.
Video

Video African Media Tries to Educate Public About Ebola

While the Ebola epidemic continues to claim lives in West Africa, information technology specialists, together with radio and TV reporters, are battling misinformation and prejudice about the disease - using social media to educate the public about the deadly virus. VOA’s George Putic has more.
Video

Video Ferguson Calls For Justice as Anger, Violence Grips Community

Violence, anger and frustration continue to grip the small St. Louis suburb of Ferguson, Missouri. Protests broke out after a white police officer fatally shot an unarmed black teenager on August 9. The case has sparked outrage around the nation and prompted the White House to send U.S. Attorney Eric Holder to the small community of just over 20,000 people. VOA’s Mary Alice Salinas has more from Ferguson.
Video

Video Beheading Of US Journalist Breeds Outrage

U.S. and British authorities have launched an investigation into an Islamic State video showing the beheading of kidnapped American journalist James Foley by a militant with a British accent. The extremist group, which posted the video on the Internet Tuesday, said the murder was revenge for U.S. airstrikes on militant positions in Iraq - and has threatened to execute another American journalist it is holding. Henry Ridgwell has more from London.
Video

Video Family Robots - The Next Big Thing?

Robots that can help us with daily chores like cooking and cleaning are a long way off, but automatons that serve as family companions may be much closer. Researchers in the United States, France, Japan and other countries are racing to build robots that can entertain and perform some simpler tasks for us. VOA’s George Putic reports.
Video

Video In Ukraine, Fear and Distrust Remain Where Fighting has Stopped

As the Ukrainian military reclaims control of eastern cities from pro-Russian separatists, residents are getting a chance to rebuild their lives. VOA's Gabe Joselow reports from the town of Kramatorsk in Donetsk province, where a sense of fear is still in the air, and distrust of the government in Kyiv still runs deep.
Video

Video Five Patients Given Experimental Ebola Drug Said to Be Improving

The World Health Organization has approved the use of experimental treatments for Ebola patients in West Africa. The Ebola outbreak there is unprecedented, the disease deadly. The number of people who have died from Ebola has surpassed 1,200. VOA's Carol Pearson reports on the ethical considerations of allowing experimental drugs to be used.
Video

Video China Targets Overseas Assets of Corrupt Officials

As China presses forward with its anti-graft effort, authorities are targeting corrupt officials who have sent family members and assets overseas. The efforts have stirred up a debate at home on exactly how many officials take that route and how likely it is they will be caught. Rebecca Valli has this report.
Video

Video Leading The Fight Against Islamic State, Kurds Question Iraqi Future

Western countries including the United States have begun arming the Kurdish Peshmerga forces in northern Iraq to aid their battle against extremist Sunni militants from the Islamic State. But there are concerns that a heavily-armed Kurdistan Regional Government, or KRG, might seek to declare independence and cause the break-up of the Iraqi state. As Henry Ridgwell reports from London, the KRG says it will only seek greater autonomy from Baghdad.
Video

Video In Rural Kenya, Pressure Builds Against Female Circumcision

In some Kenyan communities, female genital mutilation remains a rite of passage. But activists are pushing back, with education for girls and with threats of punishment those who perform the circumcision. Mohammed Yusuf looks at the practice in the rural eastern community of Tharaka-Nithi.

AppleAndroid

World Currencies

EUR
USD
0.7492
JPY
USD
102.27
GBP
USD
0.5960
CAD
USD
1.0950
INR
USD
61.300

Rates may not be current.