Facing Economic Challenges, China's Growth Slows

China's gross domestic product (GDP) grew 7.4 percent in the first quarter of 2014, the slowest rate since the third quarter of 2012, a sign for some that the world’s second largest economy is on a downward trajectory.

The growth beat earlier forecasts, but was down from the 7.7 percent rate from the same period last year. 


Shanghai city skylines. Screen grab from Youku.

Other data released showed that industrial output rose by 8.8 percent in March compared with a year earlier, a figure lower than expected. Retail sales in March registered a growth rate of 12.2 percent, pointing to the government's efforts to step up domestic consumption. 

Earlier data showed signs of stress in the Chinese economy. In the first quarter of the year, imports and exports shrank, according to the National Bureau of Statistics of China. 

The new figures released on April 16, 2014 came a week after Chinese Premier Li Keqiang pledged that the country would not resort to stimulus packages in the face of a slowing economy. During the financial crisis in 2009, China added fuel to the sluggish global economic growth with its massive domestic stimulus plans introduced to prop up the Chinese economy.

Now as Europe and the US slowly recover from recession, China is mired in a set of economic challenges ranging from a slowing growth rate and the financial risks stemming from problematic shadow banking.

The Chinese government under its currently leadership has set the economic development growth rate for 2014 at 7.5 percent.

On Twitter-like microblogging service Sina Weibo, user “Can't find object” warned of the potential danger of a slowing economy: 


The population growth in Europe and America has practically stabilised, so has their economic systems. The Chinese population is still growing, and its economy still hasn't reached a stage where a large degree of industrial automation and modernisation can be seen. Therefore, our economic growth can't be slowed, or else the problem of unemployment will arise. But it can't be too high either, or else it would be a growth model that comes at the expense of other things.

Daina complained about the authenticity of the figures released by Chinese officials: 


I never believe the figures by the National Bureau of Statistics, they are fake.

 Finance researcher Dongdeng assured

6%至8%的GDP增长率,将是我国未来30年的适度增长区间,这也是保证高质量经济增长的重要前提。地方政府切莫喜快贪功,不顾长远利益及经济增长质量,片面追求高速度,结果一定是透支后代、害人害己的。当务之急必须推行经济转型、产业升级战略。一季度GDP同比增7.4% 仍在合理区间。 

The growth rate of between 6 and 8 percent is the appropriate range of growth for China in the next 30 years. This is also the premise of high-quality growth. Local governments should discard short- sightedness and not aim for just the rate of growth, or else it will do much harm to our future generations. What is urgent for us to do is to strive for economic reconstructing and industrial upgrade. The growth rate of 7.4 percent is still within the reasonable range.

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