Last week there were jitters around the region, and among Irish companies keen to sell into the China market, about the country's slowest growth in gross domestic product in 24 years, just 7.4 per cent after what felt like an eternity of double-digit growth.
The last time the economy expanded so slowly was 1990, when it had to deal with international sanctions after the crackdown on the democracy protests in Tiananmen Square in Beijing.
On releasing the figures, the government spoke of the “new normal”, about getting the economy on a more sustainable track while tackling a housing slowdown, softening domestic demand and weak global recovery.
The figure was just shy of the government target of about 7.5 per cent for the year and just ahead of market expectations. This is still a fairly significant pace of expansion.
Davos forum
Speaking at the
Global Economic Forum
in Davos last week, premier
Li Keqiang
also sought to ease jangled nerves about China’s economy by pointing out how much room there was to grow.
“We will continue to pursue a proactive fiscal policy and a prudent monetary policy,” Mr Li told the gathering. “We will step up anticipatory adjustment and fine-tuning as well as targeted macro-regulation, in order to stabilise economic growth, upgrade its structure and achieve better quality and performance.
“China has much room for urban, suburban and regional development, and domestic demand has huge potential,” he said. “China’s condition will continue to improve and China will bring more opportunities to the world if China’s economy keeps growing at medium to fast speed for 10 to 20 years.
“To foster a new engine of growth, we need to encourage mass entrepreneurship and innovation, and mobilise the wisdom and power of the people. To transform the traditional engine of growth, we need to focus on increasing the supply of public goods and services, and strengthening the weak link of the economy,” he said.
A commentator at the Xinhua news agency said the Chinese economy was shifting its focus to consumption from polluting heavy industry and manufacturing, requiring difficult and complex reforms. But the economy “will continue to function as a vital ballast for the world economy”.
"Exports of China's trade partners from Asia, Africa, Europe and America would benefit from an expanding Chinese market as Beijing tries to wean its dependence on credit-fuel investment and government spending and to move instead to a growth model powered by domestic consumption and services industries," wrote Huang Yinjiazi.
The China team at UBS sees the outlook for the year-ahead as poised between various factors. "Risks facing our 2015 baseline forecast are now balanced, with downside risks mainly from a sharper-than-expected property adjustment, weaker-than-expected delivery of infrastructure investment, and volatility of financial conditions," the bank said in a research note.
“Upside risks may come from a stronger-than-expected global recovery (partly as a result of slower-than expected US tightening), and lower oil prices.”
Last year, the country’s gross domestic product reached 63.65 trillion yuan (€8.84 trillion). Growth in the fourth quarter came in at 7.3 per cent, flat with the rate seen in the third.
The International Monetary Fund (IMF) has cut its forecasts for China's GDP growth this year and next as the global economic rebound plateaus, although it said it believes the decline in oil prices will mean China is less reliant on stimulus.
