China’s economy grew at its slowest pace in 24 years in 2014, keeping pressure on policymakers to roll out more support measures to head off a sharper downturn.
But analysts said a slightly better-than-expected performance in the fourth quarter could temper Beijing’s policy response, Reuters reported.
China’s gross domestic product grew 7.4 percent last year, data from the National Bureau of Statistics showed, in line with the official target of 7.5 percent but still the weakest annual expansion since 1990.
The economy grew 7.3 percent in the fourth quarter from a year earlier, marginally better than expected, though it cooled from the previous three months.
Few had expected China to meet its 7.5 percent full-year target, but the performance was better than feared at one point when credit collapsed, bad loans spiked and key activity indicators fell to multi-year lows, the news agency said.
Asian markets breathed a sigh of relief on the news, with the Shanghai Composite Index bouncing 2.0 percent and the CSI 300 index adding 1.4 percent. Other stock markets across much of the region were also higher.
However, analysts point to the weak property market and high funding costs as key risks facing the economy in 2015.
Policymakers also are concerned about the potential onset of a deflationary cycle, aggravated by plummeting energy prices, industrial overcapacity and sluggish demand.
In another worrying sign, power output growth in China, used by some as a proxy for economic performance, posted its slowest growth rate since 1998 at 3.2 percent.
December data posted numerous upside surprises after a weak November. Factory output rose 7.9 percent versus expectations for 7.4 percent, while retail sales rose 11.9 percent, above predictions of 11.7 percent.
However, growth in fixed asset investment, a key growth driver, eased to 15.7 percent for the entire year, missing estimates for a 15.8 percent rise.
“The overall numbers lower the need for further stimulus, although there remains some room for easing as risks are still skewed to the downside,” said Hong Kong-based Credit Agricole economist Dariusz Kowalczyk.
He said the central bank might cut interest rates again in the first quarter, after a surprise move in November, and slash banks’ reserve requirement ratio by 100 basis points in the first half of 2015 to spur more lending.
Others, however, think Beijing may have to get more aggressive, even at risk of reinflating asset bubbles, given the need to reduce debt burdens at Chinese companies which are inhibiting them from fresh investments, the report said.
According to the country’s statistics bureau, the service sector represented 48.2 percent of the GDP last year, up 1.3 percentage points from 2013.
The share of the industrial sector was 42.6 percent, while the agricultural sector accounted for 9.2 percent, Xinhua reported.
The contribution of final consumption to GDP growth reached 51.2 percent last year, up 3 percentage points from a year earlier, it added.
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