China's Q1 GDP slows to 7.4%
CHINA'S gross domestic product grew 7.4 per cent in the first three months of the year, official data showed yesterday, increasing the chances Beijing will move to staunch a slowdown in the world's No. 2 economy.
The year-on-year figure is sharply down from the 7.7 per cent expansion in the final three months of last year, with the National Bureau of Statistics (NBS) blaming a slower-than-expected global recovery as well as economic structural reforms at home.
However, it was marginally higher than a median forecast of 7.3 per cent in a survey of 13 economists by AFP.
NBS spokesman Sheng Laiyun told reporters that China is in the "crucial stage of structural reform", while government efforts to get rid of outdated industrial capacity, conserve energy and protect the environment have "definitely come at a price".
The result marks the fourth slowdown in the past six quarters and comes as Beijing shows a willingness to accept weaker growth, as leaders try to pivot the economy away from decades of double-digit expansion fuelled by big-ticket investment projects.
"Policymakers seem pretty comfortable with the current pace of growth," said Mr Julian Evans-Pritchard, an economist at Capital Economics. "I don't think they're going to announce any further significant measures to support growth."
He added: "Meanwhile, today's figures show that wage growth continues to outstrip output growth, suggesting that the labour market, now policymakers' primary concern, remains healthy."
Last month's activity data, released with the GDP figures, showed that China may be making some headway in its attempt to enhance the role of consumption and cut its reliance on the traditional growth engines of exports and investment.
Retail sales were a shade ahead of forecasts with an annual increase of 12.2 per cent, while factory output came in just below expectations with a rise of 8.8 per cent.
Last month, China set its annual growth target for this year at about 7.5 per cent, the same as last year, though officials have been quick to stress that the target is flexible - seen as a hint it may not be reached.
Mr Liu Li-Gang, a Hong Kong-based economist for ANZ Bank, said yesterday's data was no surprise and could have been worse, while there were some positive factors now at play.
"We think the Chinese economy will likely rebound in the second quarter due to seasonal factors - like the number of newly started projects always peaks in June," he said.