China’s economy grew at 6.9 per cent in 2015, the slowest growth the country saw in the last 25 years.
On Tuesday, the data released by China’s National Bureau of Statistics (NBS) revealed that China grew at a pace of 6.8 per cent in the fourth quarter of 2015, making it the lowest quarterly rate since the global financial crisis in 2009. Thus, the annual growth rate for 2015 slipped to 6.9 per cent for the year.
China’s GDP (Gross Domestic Product) reached 67.67 trillion yuan (about USD 10.3 trillion) in 2015, with the service sector accounting for 50.5 per cent. It was the first time that the service sector ratio exceeded 50 per cent, the NBS said.
In 2015, China’s manufacturing sector continued to suffer a back seat for the third straight year. The service sector ratio jumped from 48.1 per cent in 2014 to 50.5 per cent in 2015, said the newly released data.
The NBS also said that continuous growth in the services sector indicates that China’s economic restructuring has made progress.
Factory contribution to the GDP was 10 per cent lower than services as the Chinese government tried to shift from investment powered growth to innovation led expansion.
China’s economy had been booming in the last decade mostly on the back of manufacturing, which is now witnessing a big slump. Playing down the concerns over the slowdown, the NBS said the economy still “ran within a reasonable range” in 2015, with its structure further optimised, upgrading accelerated, new growth drivers strengthened and people’s lives improved.
However, the country faces a daunting task in deepening reforms on all fronts and needs to step up supply-side structural reforms, NBS chief Wang Baoan said.
In 2015, the anticipation that the world’s second largest economy would slip below the 7 per cent mark had sparked concern both at home and abroad, impacting the world markets in a negative manner.
Last year, China witnessed the worst stock market crashes. It wiped out about USD 3.2 trillion of capital. Over 20 million small investors, who lost heavily in the volatility, deserted the market.
Major economic indicators also weakened in 2015. Industrial output growth slowed to 6.1 per cent year on year from 8.3 per cent in 2014. Slowing property investment, which again used to be a main driver of the Chinese economy, became a drag on the overall economic growth.
Analysts believe that if the Chinese economy slips below 6.8 per cent, the government may have to opt for a stimulus package which it is trying to avoid.
(With inputs from PTI)