China's economic growth edged down to 6.8 per cent in the final quarter of 2015 as trade and consumer spending weakened, dragging full-year growth to its lowest in 25 years.
Growth has fallen steadily over the past five years as the ruling Communist Party tries to steer away from a worn-out model based on investment and trade toward self-sustaining growth driven by domestic consumption and services. But the unexpectedly sharp decline over the past two years prompted fears of a politically dangerous spike in job losses.
Full-year growth declined to 6.9 per cent, government data showed Tuesday. That was the lowest since sanctions imposed on Beijing following its crackdown on the Tiananmen Square pro-democracy movement caused growth to plummet to 3.8 per cent in 1990.
The October-December growth figure was the lowest quarterly expansion since the aftermath of the global financial crisis, when growth slumped to 6.1 per cent in the first quarter of 2009. Growth in the July-September quarter of 2009 was 6.9 per cent.
Growth in investment in factories, housing and other fixed assets, a key economic driver, weakened to 12 per cent in 2015, down 2.9 percentage points from the previous year. Retail sales growth cooled to 10.6 per cent from 2014's 12 per cent.
"The international situation remains complex," said Wang Bao'an, commissioner of the National Bureau of Statistics, as a news conference. "Restructuring and upgrading is in an uphill stage. Comprehensively deepening reform is a daunting task."
"Official data do not point to a hard landing in the fourth quarter of 2015, but they provide little reason to stop worrying about China's drag on the global economy, either," said economist Bill Adams of PNC Financial Services Group in a report.
Growth was in line with private sector forecasts and the ruling Communist Party's official target of about seven per cent for the year.
As a result, Asian stock markets mostly eked out modest gains Tuesday. The Shanghai Composite was up 1.6 per cent at 2,961.58 and Hong Kong's Hang Seng gained 0.8 per cent to 19,386.75. Japan's Nikkei 225 overcame early losses to rise 0.2 per cent to 16,989.31. South Korea's Kospi advanced 0.2 per cent to 1,881.77.
Consumption expands robustly
Beijing responded to ebbing growth by cutting interest rates six times since November, 2014, and launched measures to help exporters and other industries. But economists note China still relies on state-led construction spending and other investment.
December exports shrank 1.4 per cent from a year earlier, well below the ruling party's target of six per cent growth in total trade. For the full year, exports were down 7.6 per cent, a blow to industries that employ millions of Chinese workers.
Forecasters see indications retail sales and other activity accelerated toward the end of 2015, suggesting Beijing's efforts to put a floor under the downturn are gaining traction.
"The growth picture remains two-sided. The real estate construction slump and weak exports continued to weigh on activity," said Louis Kuijs of Oxford Economics in a report.
"Meanwhile, though, consumption continued to expand robustly, supported by solid wage growth," said Kuijs. "The robust growth in the consumption and services nexus is key for policymakers. They need it to avoid labour market stress."
Spending on online commerce grew by 33.3 per cent over 2014. Wang said the share of total economic activity accounted for by consumption rose to 56.4 per cent, up 15 percentage points from 2014.
Forecasters expect economic growth to decline further this year, with the International Monetary Fund targeting a 6.3 per cent expansion.