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Will China's GDP be that bad? | Webmarked News

Will China’s GDP be that bad?

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China is set to report its fourth quarter and weakest full-year growth figure in 25 years on Tuesday. The figures come on the back of sluggish domestic and external demand, weak investments, factory overcapacity and high property inventories, which have exacerbated deflationary pressures in the world’s second-largest economy. Laura Frykberg reports.

Will China’s GDP be that bad?

Growth in China is looking grim – at least relatively speaking.

Upcoming GDP figures are likely to paint a weakening picture of the world’s second largest economy.

The premier has already warned that last year saw just under 7 percent of growth – less than the year before, and the year before that.

Add to that its roller-coaster stock market, and experts like Zhou Jingtong from the Bank of China, agree its a challenging time.

(SOUNDBITE) (Mandarin) ZHOU JINGTONG, ANALYST OF INTERNATIONAL FINANCE FROM THE BANK OF CHINA, SAYING:

“It is a time of shifting momentum for China from old to new. The traditional big industries are slowing, while the smaller emerging ones are growing – but not as fast. So the overall economy is facing downward pressure.”

It’s not all doom and gloom though, China’s housing market recovered mildly last year.

House prices rose in December and property investment grew 1.3 percent.

There’s also another industry offering hope, according to CCLA Chief Investment Officer James Bevan.

(SOUNDBITE) (English) CCLA, CHIEF INVESTMENT OFFICER, JAMES BEVAN SAYING:

“The non-manufacturing side of the economy, the service side of the industry has remained relatively strong. And that will be the area of greatest focus in the upcoming figures.”

Analysts say the Chinese government is targeting economic growth this coming year.

But that could come at a price, such as more rate cuts and increased government spending.

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