China’s economy grew at its slowest rate in a quarter of a century in 2015, data released on Tuesday showed, increasing pressure on Beijing to address fears of a prolonged slowdown and ease the jitters affecting global markets.
The full-year growth of 6.9% was only just short of government expectations of 7% but by contrast, growth in 2014 stood at 7.3%.
The slide from the previous quarter was expected, but will add to concerns about the health of the world’s second-biggest economy as it confronts a range of challenges, including weak exports, high debt levels and slowing investment.
China’s industrial output in December rose 5.9% from a year earlier, compared with forecasts for a 6.0% increase.
The lack of surprises did at least offer some respite to stock and currency markets.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.2% on Tuesday after earlier touching its lowest level since October 2011. Australian shares added 0.8%, while Tokyo’s Nikkei dropped 0.3%. In Shanghai, recent volatility gave way to a 0.2% rise, following a 13-month low on Monday.
The US dollar nudged up 0.2% to 117.55 yen after slipping last week to a four-and-a-half-month low of 116.51.
Analysts were cautiously optimistic about the China’s fortunes following the tumult of the past few weeks.
“I think that at least the biggest fears about the real economy, fears that came to the surface during the stock market rout … I think those biggest fears were overblown,” said Louis Kuijs, head of Asia economics at Oxford Economics in Hong Kong.
“We don’t see signs of an abrupt slowdown, or something getting worse than we had expected say six weeks ago.”
Gordon Kwan, a Hong Kong-based analyst at Nomura Holdings, said: “China’s GDP growth is not collapsing, even though the fourth-quarter figures are slightly lower than expectations.”
Kwan said he expected additional government stimulus, but added that the Chinese economy was “in decent shape, despite the recent hype about how it is on the verge of collapse”.
He believed the rest of the world would take positives from Tuesday’s data. “Judging by what’s happening in the markets now, there will be a sigh of relief that quarterly growth was 6.8% and not, say 6%,” he said. “But it’s early days yet – the real test will be the first-quarter GDP figures.”
Policymakers in Beijing have struggled to arrest the slide in China’s fortunes, with some analysts predicting growth of about 6.5% this year even if, as many expect, the authorities unveil fresh spending packages and cut interest rates again.
