China Is Slowing Down

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China, considered as the world’s second largest economy, is now experiencing a more moderate level when it comes to the country’s economic growth. After 24 years, China’s economy is slowing down at its weakest point. The country was reported to have a 7.7% growth last 2013 and a 7.4% growth in 2014.

For the first time in a span of 15 years, China has missed its annual economic growth target which is set at 7.5% every year. Though the market expectation for the annual growth was said to be around 7.2%, China still exceeded the figure since it has reached 7.3% from October to December of last year.

There are some who are referring to China’s economy as resilient despite the fact that 7.3% is lower than what China is used to, it is still considered as one of the highest in the world. Most of these are because of the retail sales and the accelerating industrial production in the country. Last month, retail sales were up to 11.9% while the output in factories rose to a 7.9% high. Both of these factors exceeded the assumptions.

Despite its cool down in the housing market, China’s economy was able to pull through because of the rise in factory production which compensated the losses in the growth figure.

The property investment of China which used to be a piping hot in the market took a low for five years now. It was estimated at 19.8 last 2013 and went down to 10.5% last year, 2014. The real estate market is expected to be unstable this 2015 and needs the help of central bank by easing. Easing in terms of cutting rates and liquidity injection is required to raise the current state of the real estate.

November of 2014, the central bank did rate cutting by putting it down to 2.75% in order to save the economy – the first cut since the year 2012. The easing will not be stopped anytime soon but policymakers in China are feeling positive regarding the country’s growth based on the data and are not convinced that they should change anything just yet.

Asian markets are also reacting positively to China’s economic data.