China's economic growth at 7.5 percent down from last year
Chinese authorities willing to accept slower pace of expansion
After several years of almost unimaginable economic growth in China, analysts say that authorities now seem ready to accept a slower pace of expansion. The nation's economic growth slowed in the April to June period, the second straight quarter of weaker expansion. In other words, one of the world's biggest economic powerhouses has slowed down to 7.5 percent as compared to 7.7 percent this same time last year.
"As of now, China's gross domestic product has been staying under 8 percent for five straight quarters, a clear sign of distress," economist Ren Xianfang from IHS Global Insight says. "The rather sharp growth deceleration and the recent financial market turmoil indicate that risks have been building on both the financial and real goods sector."
The government has set a target of 7.5 percent growth for the whole of 2013. This could translate to the lowest rate of expansion in more than two decades. Companies that sell to China may see revenues suffer. Nations such as Australia, Brazil and others in South East Asia have seen huge profits in recent years because of Chinese demand for natural resources.
In the meantime, the fall in demand from China has already had an impact on the prices of many commodities.
China's Finance Minister Lou Jiwei indicated last week that economic growth could be 7 percent for the year, and that this may not be the "bottom line." Xinhua news agency later corrected its report, saying Lou had said economic growth would be 7.5 percent, in line with government targets.
Some analysts are questioning whether China's growth rate might dip still further later in the year.
Other data released this week showed growth in factory output had slowed to 9.3 percent for the first half of the year, down 0.2 percent from the first three months of the year.
It is evident that China's economic growth is slowing, well below the monumental 10 percent average that the country has experienced for the last three decades. The pattern continues in the new headline figures which show GDP in the second quarter compared to what it was a year earlier.
China's National Bureau of Statistics has also published figures comparing with previous quarter. These figures showed growth of 1.7 percent in the second quarter, which would be about seven percent if it continued for a whole year. China's data are often criticized as unreliable.
The international community will have to get used to China growing at a more moderate, and perhaps more sustainable pace.
Growth in investment in factories and other fixed assets also eased. "Further deceleration is possible if reforms and stimulus measures are delayed," Alistair Chan of Moody's Analytics said in a report.
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