Beijing (dpa) – China’s economy grew by 6.7 per cent in the first quarter of 2016, according to official figures released Friday, marking a seven-year low in quarterly growth in the world’s second-largest economy.
The figure matched predictions of 6.7 per cent by economists and is in line with the gross domestic product growth target of 6.5 to 7 per cent the government had set for this year.
It follows a 6.9-per-cent expansion in 2015, the weakest in a quarter century and below the 7-per-cent target that the government had set for the whole of 2015.
Chinese leaders are trying to change the economy from one reliant on manufacturing to one driven by domestic consumption and investment. Officials have told citizens to expect a “new normal” for an economy driven by structural change and better growth.
Economists have expressed scepticism about the reliability of China’s self-reported figures.
“Given the incredibly stable nature of GDP growth it seems to continue to engender scepticism about the quality of data,” said Christopher Balding, associate professor at the Peking University HSBC Business School.
“The figure that jumped out to me is loan and financing growth is growing incredibly rapidly. The level of credit growth that we are seeing is what is driving GDP growth and the pick up in industrial activity.
“There is profound concern that without large support, growth will fall even faster causing additional problems,” Balding told dpa.
The country’s exports surged 18.7 per cent year-on-year in March, according to data released on Wednesday. This was a significant jump from a slump in exports of 20.6 per cent year-on-year in February,
Joerg Wuttke, president of the European Chamber of Commerce in China, said China’s GDP growth by the end of the year will be a better indicator of how the economy is doing.
“The next months will be better as the start of the 13th five-year plan means massive money will enter the market. This will create a feelgood period, but the underlining problems of debt buildup, overcapacity, lack of demand and a hyper financial segment means that the end of the year will be the time of reckoning,” Wuttke told dpa.
China’s leadership has released a five-year plan for economic and social development that aims to double per capita income and gross domestic product by 2020 from 2010 levels.