News / Economy

China's Economic Growth Slows

China GDP growth, 2010 - 2013
China GDP growth, 2010 - 2013
TEXT SIZE - +
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

Multimedia Anti-Keystone XL Protests Continue

Demonstrators are worried about pipeline's effect on climate change, their traditional way of life, health and safety More

Thailand's Political Power Struggle Continues

Court gave Prime Minister Yingluck Shinawatra until May 2 to prepare her defense over abuse of power charges but uncertainty remains over election timing More

Malaysia Plane Search Tests Limits of Ocean Mapping Technology

Expert tells VOA existing equipment’s maximum operating depth is around 6 kilometers as operation continues on ocean bed for any trace of MH370 More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Pet Kangaroo Helps Spread Environmental Messagei
X
Penelope Poulou
April 22, 2014 5:53 PM
Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pet Kangaroo Helps Spread Environmental Message

Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pro-Russian Separatists Plan 'Federalization Referendum' in Eastern Ukraine

Pro-Russian separatists in eastern Ukraine say they plan to move forward next month with a referendum vote for greater autonomy, despite the Geneva agreement reached with Russia, the U.S. and Ukraine to end the political conflict. VOA's Brian Padden reports from the city of Donetsk in Eastern Ukraine.
Video

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

French filmmaker Luc Jacquet won worldwide acclaim for his 2005 Academy Award-winning documentary "March of the Penguins". Now Jacquet is back with a new film that takes movie-goers deep into the heart of a tropical rainforest - not only to celebrate its grandeur, but to make the case for its survival. VOA's Rosanne Skirble reports.
Video

Video Boston Marathon Bittersweet for Many Runners

Monday's running of the Boston Marathon was bittersweet for many of the 36,000 participants as they finished the run that was interrupted by a double bombing last year. Many gathered along the route paid respect to the four people killed as a result of two bombings near the finish line. VOA's Carolyn Presutti returned to Boston this year to follow two runners, forever changed because of the crimes.
Video

Video International Students Learn Film Production in World's Movie Capital

Hollywood - which is part of Los Angeles - is the movie capital of the world, and many aspiring filmmakers go there in hopes of breaking into the movie business. Mike O'Sullivan reports that regional universities are also a magnet for students who hope to become producers or directors.
Video

Video Pacific Rim Trade Deal Proves Elusive

With the U.S.-led war in Iraq ended and American military involvement in Afghanistan winding down, President Barack Obama has sought to pivot the country's foreign policy focus towards Asia. One aspect of that pivot is the negotiation of a free-trade agreement among 12 Pacific Rim nations. But as Obama leaves this week on a trip to four Asian countries he has found it very difficult to complete the trade pact. VOA's Ken Bredemeier has more from Washington.
Video

Video Autistic Adults Face Housing, Job Challenges

Many parents of children with disabilities fear for the future of their adult child. It can be difficult to find services to help adults with disabilities - physical, mental or emotional - find work or live on their own. The mother of an autistic boy set up a foundation to advocate for the estimated 1.2 million American adults with autism, a developmental disorder that causes communication difficulties and often social difficulties. VOA's Faiza Elmasry reports.
AppleAndroid

World Currencies

EUR
USD
0.7217
JPY
USD
102.17
GBP
USD
0.5949
CAD
USD
1.1009
INR
USD
60.326

Rates may not be current.