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China's Growth Rate at 25-Year Low
Jan 23, 2016

According to data released by the Chinese National Bureau of Statistics (NBS), China's economy grew 6.9 percent year on year in 2015, the slowest annual expansion in a quarter of a century, but it is still in line with the official target. The Chinese government targeted an annual economic growth of around seven percent for 2015. But these GDP figures showed the lowest level of growth in 25 years.

Key Points

  • Growth in the fourth quarter came at 6.8 percent year on year, the lowest quarterly rate since the global financial crisis.

  • The gross domestic product (GDP) of China reached 67.67 trillion Yuan (about $10.3 trillion) in 2015, with the service sector accounting for 50.5 percent, the first time the ratio exceeded 50 percent.

  • Major economic indicators softened in 2015, with industrial output growth slowing to 6.1 percent year on year from 8.3 percent in 2014.

  • Urban fixed-asset investment continued to cool, expanding 10 percent year on year, compared with 15.7 percent in 2014.

  • Retail sales rose 10.7 percent, down from 12 percent registered in 2014. 

  • Foreign trade ended 2015 with its first annual contraction in six years.

  • Sagging global trade, rising financial risks and changing domestic market conditions were among the factors affecting the economy.

  • Ailing property sector and stock market also have their impact on the economy but they were either limited or yet to be evaluated.

  • As far as China's government debts are concerned, they accounted for less than 40 percent of the country's GDP, well below the internationally accepted alert line of 60 percent.

  • Viewed against an international backdrop, a 6.9 percent growth was not a low rate. Though slowing, China still contributed more than 25 percent of the global economic growth.

  • Employment remained stable, with the surveyed unemployment rate in major cities standing around 5.1 percent. Income also continued to increase steadily.

  • While old engines in China's economy—investment and trade—lost steam, services and consumption took the reins.

  • End-user consumption, including resident and government spending, contributed 66.4 percent of the national GDP growth in 2015, up 15.4 percentage points from 2014.

  • Online retail sales of goods surged 31.6 percent in 2015, well above the total retail sale growth. 

  • Sales of new energy vehicles soared by more than 160 percent.

  • The output growth for the high-tech industry reached 10.2 percent, 4.1 percentage points higher than the overall industrial output.

  • China's efforts to make the economy greener and more productive also sank in, with energy consumption per unit of GDP falling 5.6 percent and overall labour productivity, measured by output per worker, rising 4,733 yuan last year.

According to NBS, China's economy still "ran within a reasonable range" in 2015, with its structure further optimized, upgrading accelerated, new growth drivers strengthened and people's lives improved. However, the country faces a daunting task in deepening reforms on all fronts and needs to step up supply-side structural reforms. 


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