China's GDP growth slowed to 7.5 per cent in the second quarter amid concerns that the world's second largest economy was headed for its weakest growth in 15 years with grim prospects of missing the official target for the first time in recent years.
The data released by National Bureau of Statistics (NBS) showed that growth in the first half of the year stood at 7.6 per cent, which is in line with market expectations and was above the government's full-year target of 7.5 per cent.
“China's economy has maintained a steady growth,” Sheng laiyun, a spokesman for the NBS, said at a press conference.
According to the NBS, the GDP totalled 24.8 trillion yuan ($4 trillion) in the first six months.
“Major economic indicators are still within reasonable ranges as expected, but the economic environment remains complex,” Sheng said, adding that the market should play a better role to bring out the economy's intrinsic vigour.
The latest GDP figures headed a string of other data showing a continuous slowdown in the world's second-largest economy after China's full-year annual growth eased to 7.8 percent last year, its weakest since 1999.
Observers say that with no signs of halting the slowdown, China faced the risk of missing the government's target of 7.5 per cent this year which will be the first since the Asian financial crisis 15 years ago.
Speculation is rife even in the official media that the government may be thinking of a bailout package but it is to be seen whether it would come at all and what would be the size of it.
Chinese government has already announced about $150 billion worth of stimulus package last year to be spent on various infrastructure projects for reviving the economy.
This was in addition to $ 570 billion bailout package spend to tide over the world economic crisis in 2008.
The economic slow down in the first year of the leadership change is putting pressure on the ruling Communist Party of China (CPC) headed by President Xi Jinping who took over in March.
As the growth slowed mainly due to fall of exports caused by global economic decline, concerns are mounting about rise of unemployment which in turn could have a grave implications for the 64 year long rule of the CPC. The growth was in line with market expectations and was above the government's full-year target of 7.5 per cent, a commentary in the state-run Xinhua news agency said.
“It is not necessary to be too pessimistic; the bottom line in the government's two previous five-year plans was seven per cent.
“We should prepare for a fairly long difficult period as that is the cost of reform,” Yu Yongding, an economist at the Chinese Academy of Social Sciences, a government think tank, told agency.
China's full-year annual growth eased to 7.8 per cent last year,its weakest since 1999, due to volatile external markets and the government's domestic tightening to tame property prices and inflation.
The latest GDP figures headed a string of other data.
Industrial output increased 9.3 per cent year-on-year in the first half of 2013, while the growth of fixed-asset investment, a measure of government and private spending on infrastructure, stood at 20.1 per cent during the period, down 0.8 percentage points over the first quarter of the year.
Retail sales, a key indicator of consumer spending, increased 12.7 per cent from a year earlier.
The growth rate picked up by 0.3 percentage points from the January-March period, according to the NBS.
Xu lianzhong, an economist from the price monitoring centre of the National Development and Reform Commission, said the former growth pattern that focused on investment and exports cannot be sustained, adding that reforms on the financial system and the urbanisation process should be further promoted.
China's exports and importstook a tumble in June.
Exports dropped 3.1 per cent year-on-year to 4 174.32 billion, while imports declined 0.7 per cent from a year earlier to $147.19 billion.
“Europe is still struggling to recover from a steep downturn and the quantitative easing in the global economy will add to uncertainties,”
Zhuang Jian, an economist at the Asian Development Bank, said.
The tourism sector felt the pain directly. For instance, cruise lines on the Yangtze River received significantly fewer tourists in the first six months.