SHANGHAI — China's gross domestic product rose 7.4 in the first quarter of the year, reflecting a slowdown from the 7.7 percent growth posted in the fourth quarter of last year, China's National Bureau of Statistics said Wednesday.
The country's statistics organization said China's economy is off to a strong start this year but it also warned that "the external environment remains complicated and volatile and the national economy still faces downward pressure."
The growth figure for the first quarter of this year came in just shy of the county's full-year growth target of 7.5 percent.
China’s new leadership, which came to power last spring, has honed in on economic reform as a top priority. Leaders have acknowledged that the country’s breakneck growth of the past, largely fueled by overwhelming property and infrastructure development as well as an export-centered manufacturing base, is no longer sustainable.
Emphasis has been placed on bolstering domestic consumption, moving the manufacturing sector up the value chain and curbing an overheated property market that has led to speculation of a potentially devastating burst of a real estate bubble.
First-quarter growth in retail sales slowed to 12 percent from an annual growth rate of 13.1 percent in 2013.
Exports dropped 3.4 percent and imports grew 1.6 percent. In March alone, exports were down 6.6 percent year-on-year while imports slid 11.3 percent, the statistics bureau said.
Beijing has, so far, been steadfast in terms of how much it will let economic growth slow in China where even a slight slowdown could cause widespread job losses, resulting in potential unrest in a country where tensions have been steadily increasing due to widespread economic disparity between the rich and poor. In March, the government launched a small stimulus to fend off employment losses yet so far has shown know signs of employing any large stimulus measures as was done to fend off the global economic crisis in 2008.
Economists said that while the growth rate slowed in the first three months, the data should still give Chinese leaders enough confidence to continue pushing through with reforms.
“Decent growth and muted inflation provide a green light for China’s leadership to double down on its less expansionary credit and fiscal policies in 2014,” Bill Adams, senior international economist for PNC Financial Services Group, said in a research note.
“While growth continues to more or less on pace, the unresolved overhang of questionable investments made during the recent credit boom makes it difficult to breathe too easy,” Adams said. “Nevertheless, Chinese growth was resilient at the beginning of 2014, impressively so given the headwinds the economy faced.”
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