BEIJING (AFP) ― China’s gross domestic product grew 7.4 percent in the first three months of the year, official data showed Wednesday, increasing the chances Beijing will move to stanch a slowdown in the world’s number two economy.
The year on year figure is sharply down from the 7.7 percent expansion in the final three months of 2013, with the National Bureau of Statistics blaming a slower-than-expected global recovery as well as economic structural reforms at home.
However, it was marginally higher than a median forecast of 7.3 percent in a survey of 13 economists by AFP.
NBS spokesman Sheng Laiyun told reporters China is in the “crucial stage of structural reform,” while government efforts to get rid of outdated industrial capacity, conserve energy and protect the environment have “definitely come at a price.”
The result marks the fourth slowdown in the past six quarters and comes as Beijing shows a willingness to accept weaker growth, as leaders try to pivot the economy away from decades of double-digit expansion fuelled by big-ticket investment projects.
The NBS also said industrial production, which measures output at factories, workshops and mines, rose 8.8 percent year-on-year in March.
Retail sales, a key indicator of consumer spending, increased 12.2 percent in the same month, the NBS said, while fixed asset investment, a measure of government spending on infrastructure, rose 17.6 percent on-year in the first three months.
Authorities say they want consumer spending and other forms of private demand to propel the China’s economy into a future of more sound and sustainable growth, though they are quick to emphasize that rebalancing must not come at the expense of job creation.
The government “must fortify confidence to promote reform,” Sheng vowed earlier in a statement.
“We must create impetus by deepening reform, adjusting economic structure and improving people’s well-being in a bid to ensure a sustained and sound development of the national economy.”
He also said, however, that “the external environment remains complicated and volatile, and the national economy still faces downward pressure.”
China last month set its annual growth target for this year at about 7.5 percent, the same as last year, though officials have been quick to stress that the target is flexible ― seen as a hint it may not be reached.
The last time China missed the growth target was in 1998 during the Asian financial crisis.
The economy grew 7.7 percent in 2013, the same as 2012, which was the worst pace since 7.6 percent in 1999.
For the full-year 2014, the median forecast in the AFP survey was for expansion of 7.4 percent.
Liu Li-Gang, a Hong Kong-based economist for ANZ Bank, said Wednesday’s figure was no surprise and could have been worse, while there were some positive factors now at play.
“We think the Chinese economy will likely rebound in the second quarter due to seasonal factors ― like the number of newly started projects always peaks in June,” he told AFP.
“But whether the rebound can be sustained depends on whether China will relax its monetary policy.”