China’s economy grew at its slowest pace in 13 years last year, the government said yesterday, but an upturn in the final quarter pointed to better news ahead as a prime driver of a tepid global recovery.
GDP in the world’s second-largest economy expanded 7.8 percent last year in the face of weakness at home and in key overseas markets, the National Bureau of Statistics said.
However, it grew 7.9 percent in the final three months of last year as industrial production and retail sales growth strengthened at the end of the year, snapping seven straight quarters of slowing growth in a positive sign for the spluttering world economy.
The official statistics come as optimism grows among analysts that China’s economy will pick up steam this year after two years of relative weakness, although they — and the government — caution that the improvement will not be dramatic.
“The international economic environment remains complicated this year and ... there are still unbalanced conflicts in the Chinese economy,” bureau spokesman Ma Jiantang (馬建堂) told reporters.
Still, Ma added: “We expect China’s economy to continue to grow in a stable manner in 2013.”
Chinese stocks rose on the figures, with the Shanghai Composite Index up 0.66 percent in afternoon trading.
The slowdown in annual growth was the second in a row and marked its lowest point since 1999, when it stood at 7.6 percent, official statistics showed.
China has had to contend with weakness in the global economy, particularly the key export markets of the US and Europe, and as the government took steps to cool a once red hot property market.
However, its growth rate remains the highest among leading economies. GDP reached 51.9 trillion yuan (US$8.28 trillion) last year, further cementing its position as the world’s No. 2 economy.
GDP figures were just ahead of expectations, with economists surveyed by AFP projecting growth of 7.7 percent last year and 7.8 percent in the fourth quarter, and anticipating acceleration to 8 percent this year.
IHS Global Insight senior economist Ren Xianfang (任現芳) said the worst was probably over for China and while it had avoided a “hard landing,” challenges remained as it entered a “new normal” of slower growth.
“The rebound by itself looks quite shaky,” she wrote in a report after the data. “The trajectory of recovery is flat, mirroring the shallow downturn it’s rebounding from.”
Growth had slowed for seven straight quarters through September, when the economy expanded 7.4 percent, the worst since early 2009. Annual GDP grew 9.3 percent in 2011 and 10.4 percent in 2010.
The country’s economy is widely seen as having matured to the point where the growth model of the past, including public spending for big ticket infrastructure projects, must be modified.
Zhang Zhiwei (張智威), China economist for Nomura International in Hong Kong, told reporters: “The data showed that the recovery is on track, but in the meantime inflation is picking up. So monetary policy will likely be tightened this year, with no chances of cuts in banks’ reserve requirements or interest rates. As a result, GDP growth may slow down in the second half of this year.”
The statistics bureau also released other key indicators yesterday.
Industrial production grew 10 percent last year, with retail sales, China’s main gauge of consumer spending, increasing 14.3 percent.