China’s economic growth slowed further in the second quarter of 2013. The world’s second-largest economy reported growth of 7.5% in the period April to June, against 7.7% in Q113 and 7.8% during 2012, which was the slowest annual rate in 13 years.
However, the data was in line with the figure pencilled in by analysts, who believe that China’s authorities are now ready to accept a slower pace of expansion after years of double-digit growth. Weaker trade data and action taken to rein in bank lending over the period both contributed to the slowdown.
The majority of areas within the Chinese economy registered weaker performance in Q213. Industrial output edged down to 8.9% growth year on year in June from 9.3% in May. Fixed-asset investment slowed to 20.1% growth in year-to-date terms from 20.6% in May. Exports fell in June for the first time in more than a year.
“I think the second half [of 2013] will be even weaker,” said Zhu Haibin, an economist with JP Morgan. “The government’s tolerance for slower growth is definitely higher; 7% is probably the growth floor. Big stimulus is not going to come out, that is for sure. But there is some room for small-scale stimulus, like support for specific industries.”
This projected figure would be below the government’s growth target for 2013 of 7.5% and would mark the first time since the Asian financial crisis 15 years ago that China has missed its annual growth target.
However, the country’s leaders have regularly stressed that the long-term goal is to rebalance China’s economy away from an over-reliance on exports and investment, and spur consumer spending instead.
A spokesperson for China’s National Bureau of Statistics (NBS) said: “Major indicators are within our targeted range but we face a complex situation.”
“Some measures, including the intensified property tightening campaign, new rules to curb misuse of public funds and the exit some previous stimulus policies, will inevitably have some impact on growth in the short term, but they will benefit our economy in the long run,” said NBS representative Sheng Laiyun at a press conference.
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