China yesterday lowered last year’s economic growth figure to 7.3 percent after concerns about slowing expansion caused global market havoc, but said its own stock exchanges are stabilizing following “bubbles” and painful corrections.
The new number remains the lowest since 1990, when growth plummeted to 3.9 percent. Global stock markets have been pummeled by concerns over slowing growth in the country, a key driver of the world economy.
The Chinese National Bureau of Statistics said on its Web site it reduced the GDP growth figure from the 7.4 percent announced in January after a “preliminary confirmation.”
A final confirmation could come in January next year, it added.
After decades of double-digit expansion, authorities are trying to pull off a difficult rebalancing — from an investment and export-led economic model to one in which domestic consumer demand drives slower but more sustainable growth.
Chinese Minister of Finance Lou Jiwei (樓繼偉) 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 is“expected to remain at around 7 percent and the situation may sustain for four to five years,” he said.
Chinese growth slowed in the first two quarters of this year, reaching 7 percent in both periods.
Nomura International analyst Wendy Chen (陳家瑤) said yesterday’s 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,” she told reporters.
The central bank governor and market regulator said at the weekend that there had been “bubbles” on the exchanges, but that the turmoil was almost over.
“Bubbles continued to build up until mid-June,” People’s Bank of China Governor Zhou Xiaochuan (周小川) said at the meeting in Ankara, according to a statement on the central bank’s Web site.
“The correction in the stock market has now come close to an end,” Zhou said, refraining from using the word “burst” and adding that the Chinese economy was not “much affected” by the rout.
The National Development and Reform Commission, China’s top economic planning agency, played down growth concerns, saying electricity consumption and railway cargo transport — two of the indicators Chinese Premier Li Keqiang (李克強) reportedly refers to when gauging the health of the economy — improved last month.
Property prices and transaction volumes also rose, it said in a statement yesterday, predicting the economy would be “able to achieve the full-year expansion target” of about 7 percent.
The market regulator, the China Securities Regulatory Commission sought to reassure investors, even as it echoed Zhou’s comments.
The gains “had been too rapid and large, forming stock market bubbles, therefore subsequent plunges and adjustments were inevitable,” it said in a statement, adding that the “risks and bubbles have been released to some extent.”
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