Asian markets were positive after China's National Bureau of Statistics (NBS) published key data on Monday, including China's GDP figures for the whole of 2018, seeing increases in mainland, Hong Kong and Japanese indices.
With GDP growing 6.6 percent in 2018 and 6.4 percent in the final three months of the year, NBS Director Ning Jizhe said at a press briefing that although China is facing increased downward pressure, the country's economy is sustaining the momentum of progress.
Most analysts – Chinese and Western – agreed with Ning, with expectations of a return to growth in the latter half of the year.
How the markets reacted
Asian markets rose in response to the data release, with the Shenzhen Component Index up 0.83 percent and the Shanghai Composite Index adding 0.68 percent. Hong Kong's Hang Seng and Japan's Nikkei were also up, increasing 0.4 and 0.3 percent respectively, with the latter hitting a one-month high.
Many investors are anticipating further support from Chinese authorities in the wake of the data release, with the prospect of monetary easing lifting banking and construction shares.
While U.S. markets were closed for Martin Luther King Jr. Day, European markets mostly fell flat, as Brexit uncertainty continued to compound market negativity, with Germany's DAX and France's CAC 40 all ending the day in negative territory.
Oil prices were up slightly, with investors shrugging off concerns about the Chinese GDP figures.
Production cuts agreed by OPEC in December 2018 are slowly boosting prices, while Chinese demand remains strong.
Further NBS data released Monday showed China's crude oil refinery throughput in 2018 climbed to a record 12.1 million barrels per day, up 6.8 percent from the previous year.
How did analysts react?
Talking to Reuters, CMC Markets chief market analyst Michael Hewson reflected how slowing GDP growth in China was nothing to be surprised about, saying "It simply isn't possible for the Chinese economy to grow at the pace that it has over the last 10 years, in the next 10 years."
Craig James, chief economist with CommSec told the Financial Times "there were reasons to be encouraged in the December data with production bettering forecasts."
Reiterating Hewson's viewpoint, James added that as China matures into a developed economy, its GDP "could never continue to lift at a 7 per cent plus growth rate."
In an interview with China Economic Weekly, Sheng Songcheng, an adviser to the People's Bank of China, said it "would take some time" for the effects of economic policy to be felt, with China's economy set to recover in the second half of the year.
Sheng added that the current round of regulation on real estate in the country was "unprecedented," and called on authorities to stick with such policies "no matter the cost."
