China registers slowest economic growth in 25 years
New Delhi : China, a country which had been on the ebb of high and low in lieu of its economic growth pattern, has reached a low ebb of growth, and recent data revealed that China has touched a base of lowest ebb over a span of 25 years. China’s economy grew by 6.9% in 2015, compared with 7.3% a year earlier, marking its slowest growth in a quarter of a century. China registers its impact on the entire globe, and a high growth rate had always brought hopes for the entire global market trend. However, this decline data of China’s growth, a country which was perceived as seen as a driver of the global economy — is a major concern for investors around the world.
Beijing’s internal official projection was poised at a target of “about 7%” for the world’s second-largest economy.Reacting on the data of facts, Chinese Premier Li Keqiang said weaker growth would be acceptable as long as enough new jobs were created.
Financial analysts believe that China’s growth is actually much weaker than official data suggests, though Beijing denies numbers are being inflated. Analysts opine that any growth below 6.8% would likely fuel need for further economic stimulus. As per the country’s National Bureau of Statistics, its data release suggested an Economic growth in the final quarter of 2015 to be slabbed down to 6.8%.
China had been on a fierce growth trajectory for almost more than a decade. Data supporting the turnaround on downside after such a rapid upward journey suggests that China’s economy has experienced a painful slowdown in the last two years. Shift in indicators such as consumption, exports, investment and services states that probably, the central government wants to move towards an economy led by consumption and services, rather than one driven by exports and investment. And, as data reveals, managing that transition has been challenging.
Analysts opine that China’s focus on creating an economy driven by consumption is misplaced, as, when the country attempts to rebalance its economy, it should focus on productivity in order to sustain high growth. HSBC’s John Zhu mentioned — While higher consumption can support growth in the short run, there is little in economic theory that emphasizes the expenditure side of GDP as a driver of growth….China’s current stage of development would require more investment, not less, and that the country would rebalance naturally towards consumption and services in time. Pushing the economy along those paths too soon would be dangerous.