China Cuts 2014 GDP Growth Figure To 7.3%, Say Further Revisions Likely

[GennGreymane]

http://www.ibtimes.com/china-cuts-20...likely-2085056

China on Monday revised its 2014 GDP growth figure to 7.3 percent from a previously reported 7.4 percent. The revision comes just a day after China’s Finance Minister Lou Jiwei said that the country’s overall GDP growth would remain at approximately 7 percent.

According to the state-run Xinhua news agency, which cited China’s National Bureau of Statistics, the country’s revised GDP for 2014 stood at 63.6 trillion yuan ($10 trillion), down by 32.4 billion yuan from the initial estimate. The figure is subject to further revision, the report added.

After the revision, China’s services sector accounted for 48.1 percent of GDP in 2014, down from the previously announced 48.2 percent, while the manufacturing and construction sector accounted for 42.7 percent of GDP, Xinhua reported. The primary sector -- agriculture -- grew 4.1 percent.

“China revises growth data every year, but it's usually upwards. In that regard, it is unusual that the revision was downwards,” Dariusz Kowalczyk, senior economist and strategist at Credit Agricole, told CNBC. “Rationally speaking, a 0.1 percent revision isn’t a big deal -- and it doesn't tell us much about the Chinese economy, but when it comes to sentiment, this is a negative development.”

In 2015, China is headed for its slowest economic growth in over two decades, even as the government attempts to revive the economy through a raft of measures, including cutting benchmark interest rates, lowering the amount of deposits banks must hold in reserves and devaluing the yuan -- a move that triggered a rout in the country’s stock markets.

However, the announcement did not seem to have affected Chinese stocks. The Shanghai Composite Index was trading up 0.88 percent while Hong Kong's Hang Seng index was up 0.22 percent.

[Independent voter]

7% is huge for an economy like that. If the US saw 7% we'd be very happy.

What surprised me is how much the rest of the world was affected by the Chinese slump, turns out China was the great economic engine that was pulling the rest of the world along. Brazil, Germany, Japan, all have seen huge impacts. The price in oil has dropped because people see Chinese demand dropping and that's hurt countries like Saudi Arabia and Russia.

The US is mostly insular but not entirely.

Amazing.

[GennGreymane]

7% is huge for an economy like that. If the US saw 7% we'd be very happy.

What surprised me is how much the rest of the world was affected by the Chinese slump, turns out China was the great economic engine that was pulling the rest of the world along. Brazil, Germany, Japan, all have seen huge impacts. The price in oil has dropped because people see Chinese demand dropping and that's hurt countries like Saudi Arabia and Russia.

The US is mostly insular but not entirely.

Amazing.

Other countries latched onto China since it began being a major manufacturing hub. China also has a massive population, does a ton of exporting, and plenty of other things. Most of the slump is not from internal issues in the countries you mention, but almost exclusively within China.

A wrench was basically thrown into the machine that is China and we can expect some changes. It is a bubble.

[Nadiru]

7% is huge for an economy like that. If the US saw 7% we'd be very happy.

What surprised me is how much the rest of the world was affected by the Chinese slump, turns out China was the great economic engine that was pulling the rest of the world along. Brazil, Germany, Japan, all have seen huge impacts. The price in oil has dropped because people see Chinese demand dropping and that's hurt countries like Saudi Arabia and Russia.

The US is mostly insular but not entirely.

Amazing.

7% for China is roughly 3.8% for the US. Bigger numbers means it's harder to get percentile growth up. And yes, that does display the gap that China has yet to bridge between it and the US just in raw GDP terms; in income disparity, total private wealth, GDP per capita, median household income, and a slew of other metrics, China isn't even close.

[GennGreymane]

To go off on that

this is why even though china has a huge population, and plenty of manufacturing, that many numbers put them at being equal to surpassing the u.s in 2050, decades from now.

[Nadiru]

To go off on that

this is why even though china has a huge population, and plenty of manufacturing, that many numbers put them at being equal to surpassing the u.s in 2050, decades from now.

Manufacturing isn't the end-all of growth. China, Japan, and Germany still want it to be 1980 or maybe 1995 where they can manufacture to their heart's content and global markets will gladly snap up all the stuff they make. But it's not 1995, it's 2015, and nobody is buying anymore.

[GennGreymane]

Manufacturing isn't the end-all of growth. China, Japan, and Germany still want it to be 1980 or maybe 1995 where they can manufacture to their heart's content and global markets will gladly snap up all the stuff they make. But it's not 1995, it's 2015, and nobody is buying anymore.

And that is a part of why we are seeing cracks in that bubble.