China’s economy grew by 7.7 percent in the fourth quarter of 2013 from a year earlier according to the latest data released early this morning at 2am, confirming the country is entering a period of slowing growth not seen since the late 1990’s. The Q4 2013 read compares 7.8 percent growth in the previous three months. The median forecast of 24 economists polled by Reuters of a 7.6 percent growth rate between October and December, so the actual result was marginally ahead of expectations. Estimates are for 2014 as a whole to see the slowest growth since 1990 of 7.4%.
Industrial production rose 9.7 percent in December from a year earlier, down from a 10 percent gain in November. Retail sales last month rose 13.6 percent from a year earlier, from 13.7 percent in November.
Beijing is looking to a period of more subdued growth with a refusal to boost state investment and with Chinese consumers marginally cutting back on their consumption of goods from local factories. Export growth which was 8% in 2013 is in decline as wages start to rise and manufacturing in China looks less alluring than it was compared with Vietnam and other emerging economies. Many Chinese factories have closed early for Chinese New Year because of slack demand.
Profits at China’s listed banks are set to grow by less than 10 per cent in 2014, for the first time since at least 2005 because of this slowdown. Chinese state-controlled banks have benefited from strict controls on lending and deposit rates that have helped fund China’s booming investment-led growth meaning that profit growth has historically been in double digits for many years.
China is aiming to restructure its growth away from investment and production in areas such as building roads and other infrastructure projects towards consumption and services. As China refocuses from industry to more of an emphasis on services, a deceleration in the huge growth that the country has seen for the last few decades is bound to happen. The Chinese leadership believes a minimum growth rate of 7 percent is the goal. Anymore and the economy has a risk of overheating, any less and the fears that the country is on the verge of an abyss driven by excessive credit, reckless speculation and white elephant infrastructure projects.
Contrarian Investor UK
by contrarianuk
Q4 2013 Chinese GDP data confirms slight slow down
Jan 20, 2014 at 6:25 am in Market Commentary by contrarianuk
Industrial production rose 9.7 percent in December from a year earlier, down from a 10 percent gain in November. Retail sales last month rose 13.6 percent from a year earlier, from 13.7 percent in November.
Beijing is looking to a period of more subdued growth with a refusal to boost state investment and with Chinese consumers marginally cutting back on their consumption of goods from local factories. Export growth which was 8% in 2013 is in decline as wages start to rise and manufacturing in China looks less alluring than it was compared with Vietnam and other emerging economies. Many Chinese factories have closed early for Chinese New Year because of slack demand.
Profits at China’s listed banks are set to grow by less than 10 per cent in 2014, for the first time since at least 2005 because of this slowdown. Chinese state-controlled banks have benefited from strict controls on lending and deposit rates that have helped fund China’s booming investment-led growth meaning that profit growth has historically been in double digits for many years.
China is aiming to restructure its growth away from investment and production in areas such as building roads and other infrastructure projects towards consumption and services. As China refocuses from industry to more of an emphasis on services, a deceleration in the huge growth that the country has seen for the last few decades is bound to happen. The Chinese leadership believes a minimum growth rate of 7 percent is the goal. Anymore and the economy has a risk of overheating, any less and the fears that the country is on the verge of an abyss driven by excessive credit, reckless speculation and white elephant infrastructure projects.
Contrarian Investor UK