At 6.9%, China's GDP grows slowest in 25 years

20 Jan '16

2 min read

For the first time in 25 years, China's economy grew at its slowest pace at 6.9 per cent in 2015, sparking global concerns over the health of the world's second largest economy and its impact on investors as the Communist giant embarked on painful economic reforms.

The growth rate, released by Chinas the National Bureau of Statistics (NBS) on Tuesday, moderated to 6.8 per cent for the fourth quarter, the lowest quarterly rate since the global financial crisis in 2009, and 6.9 per cent for 2015. The growth rate is marginally lower than the 7 per cent the government had targeted for 2015.

The 6.9 per cent growth rate is the slowest in the country since the 3.8 per cent in 1990, a year after the bloody Tiananmen Square crackdown rocked the country and isolated it internationally.

According to the new data, Chinas Gross Domestic Product (GDP) reached 67.67 trillion yuan (about $10.3 trillion) in 2015, with the service sector accounting for 50.5 per cent, the first time the ratio exceeded 50 per cent overtaking the manufacturing, the NBS said.

Analysts said if the economy slips below 6.8 per cent the government may have to opt for a stimulus package which it is trying to avoid. The slowdown has already destabilised China's stock market last year which also had negative effect in the world markets.

After experiencing rapid growth for more than a decade, Chinas economy has experienced a painful slowdown in the last two years.

Since last year the government has also been vocal about the slowdown saying that the Chinese economy has entered a "new normal" in view of the transition from a state-led investment and manufacturing growth to one more dependent on services and consumption.

China is the biggest market for goods produced by some nations. With the Chinese buying fewer goods or commodities, it is dragging down the economies and commodity prices of the exporting countries. (SH)

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