China today said its economy continued to slow down in the first quarter this year, declining to 6.7 per cent but in line with government targets amid claims by officials that several key indicators showed signs of stabilisation in the world’s second largest economy.
The country’s GDP grew 6.7 per cent year-on-year to reach 15.9 trillion yuan (USD 2.4 trillion), data released by the National Bureau of Statistics (NBS) showed. The growth further narrowed from the previous quarter’s 6.8 per cent, which was already the lowest quarterly rate in seven years.
Chinese economy logged 6.9 per cent last year the lowest in over two-and-a-half decades. Officials however say that Q1 growth of 6.7 per cent was in line with market expectations and remained within the government’s targeted range between 6.5 and 7 per cent for 2016.
New growth momentum is gathering and some major indicators have seen positive changes, NBS spokesperson Sheng Laiyun said at a press conference, calling the first-quarter performance “a good start” to this year.
The retail sales of consumer goods increased 10.3 per cent in the first quarter year-on-year which points to increase in consumer demand as China tried to reset its export-led economy to one based on services and consumption to halt the slowdown.
In March, retail sales were up 10.5 per cent year-on-year, faster than the growth rate in the first two months this year. The value-added industrial output, an important economic indicator, expanded 5.8 per cent year-on-year in the first quarter, accelerating from the 5.4 per cent increase for the January-February period as per NBS data.
Fixed-asset investment rose 10.7 per cent year-on-year in the first quarter, a faster expansion than last year’s 10 per cent. Investment in the property sector grew 6.2 per cent, accelerating from 1 per cent for the whole of 2015. Industrial output expanded 5.8 per cent, accelerating from the 5.4 per cent increase for the January-February period.
The service sector grew 7.6 per cent, outpacing a 2.9 per cent increase in the primary industry and 5.8 per cent in the secondary industry. It accounted for 56.9 per cent of the overall economy, up 2 percentage points from a year earlier, Sheng said.
A prolonged industrial glut, sagging foreign trade and cooling property investment dragged down China’s growth in 2015 to 6.9 per cent, the slowest pace in 25 years.
Authorities have taken a slew of measures to mitigate the downshift, cutting interest rates, reducing taxes, slashing overcapacity and initiating reforms to improve efficiency.