Chinese economic development slowed to a relative crawl in 2015 with only 6.8 percent expansion compared with 7.4 percent the previous year. That’s the slowest growth in 25 years.
Investors will be keeping a keen eye on the figures, as China’s expansion is seen as a significant driver of the world economy as a whole. And there could be tougher times ahead; with the IMF projecting that growth for the world’s second largest economy could drop further over the next two years, down to only 6 percent.
The Chinese government are taking the figures with a pinch of salt, with Premier Li Keqiang saying the economy would continue to grow at an acceptable rate as long as employment data continued to be favourable.
Many analysts, however, say Beijing may be cooking the books and that real world figures could be a lot weaker than the official reports suggest.
Specialists at the prominent Japanese investment firm CITIC Tokyo International, which is heavily involved with the Chinese stock market; say central bank stimulus would be in order if expansion slipped below the 7 percent mark that has been the government’s long term growth target.
China has been living the economic dream for the last 10 years, but recently it has come crashing back down to Earth with a humbling downturn in growth.
The slowdown could be testament to the change in strategy the central government have been keen to implement, as an export and investment driven economy is abandoned in favour of a more developed services and consumption based philosophy.
Many analysts argue it’s the wrong track for the country to take, and that continued high levels of manufacturing and exports are essential to keep expansion at sustained target levels.
John Zhu, head of trading at HSBC Asia, said, “Consumption really is a short term stop-gap tactic for growth. China should stick to what they are good at, and what works, and that is their fantastic ability to produce and export goods.”
