China cuts 2014 GDP growth from 7.4% to 7.3%–govt

An investor scratches his head near an electronic board displaying market movements at a brokerage in Beijing, August 31, 2015. China on Monday lowered its GDP growth figure for last year by ten basis points to 7.3 percent. AP

BEIJING, China — China on Monday lowered its GDP growth figure for last year by ten basis points to 7.3 percent, authorities said, as concerns mount over slowing expansion in the world’s second-largest economy.

The National Bureau of Statistics said on its website it lowered the figure from the 7.4 percent announced in January after a “preliminary confirmation”. A final confirmation could come in January, it added.

The new figure remains the lowest since 1990, when growth plummeted to 3.9 percent.

Global stock markets have been pummeled by concerns over slowing growth in China, a key driver of the world economy.

After decades of double-digit expansion authorities are trying to pull off a tricky rebalancing from an investment-and export-led economic model to one where domestic consumer demand drives slower but more sustainable growth.

But Nomura International analyst Wendy Chen told AFP: “The GDP correction for last year mainly came from the service sectors, which had lower growth than earlier figures showed.”

Services growth was key to overall transition, “so this means China’s economic structure did not improve as well as expected”, she added.

Chinese growth slowed in first two quarters of this year, reaching 7.0 percent in both periods.

Data showing an official gauge of Chinese manufacturing at a three-year low sent world markets into a tailspin last week, as investors gave vent to worries the economy is headed for a “hard landing”.

By mid-morning Monday, Shanghai was still in positive territory, although it trimmed earlier gains following the GDP announcement.

“The GDP figure correction for last year has little impact on the market,” Shenwan Hongyuan Group analyst Qian Qimin told AFP.

“It was the figure for last year and everyone knows the economy is not good anyway. The market is still fluctuating, but small company stocks are rallying after heavy losses earlier.”

Chinese stocks soared more than 150 percent in the year to mid-June in a spectacular debt-fuelled rally, but have since plummeted nearly 40 percent in the country’s worst market rout in almost two decades.

China last month reduced interest rates for the fifth time since November and cut the amount of money banks must hold in reserve to try to bolster its economy and restore market confidence.

Investors have also been alarmed by authorities’ surprise lowering of the yuan currency’s central rate against the US dollar by nearly five percent in a single week last month.  CB