Financial News

  • 21 January 2014, 6:47

China GDP Growth Slows To A 14-Year Low

The world's second largest economy expanded at its slowest rate for more than a decade, official figures have revealed.

China's economy  was recorded at 7.7% in 2013, the worst growth performance since 1999.

Its government has now warned that there are "deep-rooted problems", which include the massive debt liabilities of local authorities.

GDP expansion in the fourth quarter was also recorded at 7.7, slowing from 7.8% in Q3.

The full 2013 GDF figure was static from the year previous, and the most disappointing rate since 1999, according to the official National Bureau of Statistics (NBS).

However, the figure remained 0.2% above the government target.

"Generally speaking China's economy showed good momentum of stable and moderate growth in 2013, which is (a) hard-earned achievement," NBS chief Ma Jiantang said.

"However, we should keep in mind that the deep-rooted problems built up over time are yet to be solved in what is a critical period for China's economy."

Post-Mao, China has sought to dilute the isolationism of its communist command economy.

The strategy has seen blistering growth and data released this year now indicates it has cemented its position as the world's second largest economy.

But the country is widely expected to face slower expansion in the years ahead.

Its leaders under President Xi Jinping say they are committed to transforming China's growth model to one where consumers and other private actors play the leading role, rather than huge and often wasteful state investment.

Economists now expect China's growth rate to ease in 2014 to around 7.5%.

While China's growth rate in the early years of the 21st century regularly remained in double digits, the 2013 rate is the third consecutive year of single figures - a status not seen since 2002.

The NBS warned China faces problems including dealing with burgeoning local government debt.

"The foundation of economic growth remains to be consolidated, the internal driving forces of economic expansion need to be further fostered," Mr Ma said.

"The risk of local government debt should be prevented and greater efforts are to be made to weed out out-dated production capacity."

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