China economy grows 7.7 pct in 2013, beating government target

Workers build an architectural structure in Jiujiang, east China's Jiangxi Province, Oct. 14, 2013. China's economy grew 7.7 percent year on year in 2013, the National Bureau of Statistics said on Jan. 20, 2014. Last year, the country's gross domestic product (GDP) reached 56.8845 trillion yuan (9.31 trillion U.S. dollars). (Xinhua/Zhang Haiyan)

China's economy grew 7.7 percent in 2013, the same as 2012, overshooting the government target of 7.5 percent, according to the National Bureau of Statistics (NBS) on Monday.

Gross domestic product (GDP) totalled 56.9 trillion yuan (9.3 trillion U.S. dollars), the NBS said.

"China's economic performance stabilized in 2013 despite downward pressure both at home and abroad," said Ma Jiantang, director of the NBS at a press conference, citing encouraging GDP and job data as well as subdued inflation.

The Chinese government defined the "upper and lower limits" of the reasonable range of economic performance in 2013. With a GDP growth rate of 7.5 percent, the "lower limit" is intended to ensure steady expansion and employment, and with the consumer price index at around 3.5 percent, the "upper limit" is meant to prevent inflation.

Key 2013 economic indicators have turned out to be within the range, as China created more than 10 million new jobs and inflation came in at 2.6 percent for the whole year.

It is "a good report card" presented to China's leaders who took office in March last year, said experts.

STABILIZED PERFORMANCE

Monday's GDP data headed a string of other positive economic figures.

Retail sales growth slowed slightly to 13.6 percent in December from November's 13.7 percent, in line with market expectations.

"The slightly lower retail sales expansion is due to softer catering sales growth as the government continued to crack down on luxury consumption," said a note from a research team with the Bank of America Merrill Lynch led by chief China economist Lu Ting.

Fixed asset investment growth rose 19.6 percent in the whole of 2013, following the 19.9 percent expansion in the Jan.-Nov period.

"Growth in fixed asset investment is at decade lows as the Chinese government tries to steer the economy away from investment-led growth," said a research note from Moody's Analytics.

"We are likely to see a continuation of slower but more sustainable investment growth in 2014 as policy makers focus on rebalancing the economy to domestic consumption," said the research note.

Sheng said China's economic structuring is improving in 2013, with higher proportion of the tertiary sector, which took up a 46.1-percent share in the GDP structure, up from 44.6 percent in 2012 and exceeding the secondary sector for the first time.

Sheng said China adopted an innovative macro-economic management approach last year by defining "upper and lower limits" of the reasonable economic range, and addressing both current and long-term needs of the economy.

These efforts have enabled China to tide over the difficult period and put the Chinese economy on a more stable footing, according to Sheng.

FORECAST INTO 2014

The Chinese economy grew 7.7 percent in the final quarter of 2013, marking a moderate slowdown from 7.8 percent in the third quarter.

Zhang Liqun, an analyst with the Development Research Center of the State Council, said downside pressure still exists, citing deep-rooted problems including mounting local government debt and industrial overcapacity.

"The country should further promote reforms to release dividends and generate internal driving force of the economy," said Zhang.

"As the world situation improves, China's economic growth may pick up in the third and fourth quarter of this year," he said.

Lu Ting and his team are more optimistic. "It is very likely for GDP growth to rebound again in the first two quarters of 2014," said their research note. "The chance for it to rise to around 7.8 percent to 7.9 percent is quite high in the first and second quarter of this year."

"Retail sales growth will accelerate in the first few months this year thanks to a lower comparison base as the country's frugality campaign started in the beginning of 2013," said the research note.