Chinese Economic Growth Slows To Lowest Level Since 1999

By MAMTA BADKAR

The Chinese economy expanded 7.7% in the fourth quarter of 2013. This was down from 7.8% in Q3, but above expectations for a 7.6% rise.

On the quarter, Q4 GDP was up 1.8%. This was down from 2.2% in Q3, and below expectations for a 2% rise.

GDP growth was up 7.7% in 2013, this was the lowest level seen since 1999, according to Xinhua.

"We anticipate the upcoming data release to show China's economy losing steam somewhat in December," UBS' Harrison Hu said in a note released head of the data.

"Though sequential growth momentum likely held steady or declined slightly across most domestic demand sectors, a high base effect would have weighed upon headline activity numbers."

But China is also releasing a string of other data tonight that will give us more of an insight into the health of the economy.

Chinese industrial production was up 9.7% on the year in December. This was lower than the 10% rise in November, and missed expectations for a 9.8% rise. Year-to-date (Ytd) industrial production was up 9.7% in line with expectations and from 9.7% in November.

Retail sales were up 13.6% on the year in line with expectations, but down from 13.7% the previous month. Ytd retail sales were up 13.1% on the year, in line with expectations and up from 13% in November.

For the year, retail sales slowed to 13.1%, from 14.3% in 2012.

"We expect retail sales growth to rebound in the first few months in 2014 thanks to a lower comparison base (remember the frugality campaign started in the beginning of 2013)," Bank of America's Ting Lu wrote in a note to clients, referring to the crackdown on corruption that weighed on retail sales in early 2013.

Finally, Ytd fixed asset investment (FAI) was up 9.7% on the year. This was in line with expectations and compared with a 9.7% rise the previous month.

Railway FAI jumped to 18.4% in December, from -7.6%, "as the government raised the year-end FAI target by RMB 40bn in November," Ting pointed out. Meanwhile, manufacturing FAI picked up too, rising 18.4%, from 14.1% in November.

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