China’s gross domestic product (GDP) rose 7.4 percent in 2014, official data showed on Tuesday, slumping to a 24-year low with authorities describing slowing expansion as the “new normal” for the world’s second-largest economy.
The 2014 figure announced by the National Bureau of Statistics (NBS) was below growth of 7.7 percent in 2013, but exceeded the median forecast of 7.3 percent in an AFP survey of 15 economists.
GDP also expanded 7.3 percent year-on-year in the fourth quarter of last year, the NBS said, matching the 7.3 percent result in the previous three months and beating the 7.2 percent median forecast in the survey.
“China’s economy has achieved stable progress with improved quality under the new normal in 2014,” NBS chief Ma Jiantang told reporters.
“However we should also be aware that the domestic and international situations are still complicated and economic development is facing difficulties and challenges.”
AFP / Greg Baker
Workers walk across steel beams on a construction site in Beijing, on December 18, 2014
The full-year result was the worst since the 3.8 percent recorded in 1990 and comes as one of the pillars of the global economy was hit last year by troubles including manufacturing and trade weakness as well as declining prices for real estate, which has sent a shock through the country’s key property sector.
The government had set an official expansion target of “about” 7.5 percent for last year. The goal is traditionally pegged at a level that is easily achieved, and is usually approximated to provide room for positive spin just in case it is missed.
The 2014 result is the first miss since 1998 during the Asian economic crisis.
The NBS also said industrial production, which measures output at factories, workshops and mines, rose 7.9 percent year-on-year in December.
Retail sales, a key indicator of consumer spending, increased 11.9 percent in the same month, while fixed asset investment, a measure of government spending on infrastructure, expanded 15.7 percent on-year for the whole of 2014.
AFP / Wang Zhao
People with shopping bags are seen outside a mall in Beijing, on December 6, 2014
For this year, the economists in the AFP survey see growth slowing further to a median 7.0 percent.
Despite the slowdown last year, authorities say they intend to stick to the path of transforming the economy into one where growth is increasingly driven by consumer spending, and emphasising quality of expansion over size.
Still, authorities last year did not take an entirely hands off approach to the growth slowdown, implementing a a series of targeted measures analysts described as “mini-stimulus”, while in November the central People’s Bank of China cut interest rates for the first time in more than two years to try to put a floor on the slowdown.
Economists are broadly expecting further monetary policy tinkering this year, but say the focus will be on structural reforms over the temptation of major stimulus.