Chinese GDP grew by the slowest growth rate since 2009

Tuesday, Jan 19 2016

Chinese GDP is out, and it’s right in line with expectations at 6.8% annualised for the December quarter. Despite meeting forecasts, it was the slowest growth rate since the first quarter of 2009. Full-year growth was 6.9%, roughly in line with the government’s target of 7.0% for the year. It was the slowest annual expansion recorded since 1990. According to China’s National Bureau of Statistics, the preliminary estimate for GDP was 67,670.8 billion yuan, or around $10,300 billion, for the year.

Growth across China’s tertiary industries – predominantly services – increased by 8.3% to 34,156.7 billion yuan, outpacing growth in secondary (27,427.8 billion yuan) and primary industries (6,086.3 billion yuan) of 6.0% and 3.9% respectively.The breakdown suggests that China’s economic transformation away from industrial, trade and investment-led growth to that powered by services and consumption is, on face value, continuing as planned.

“In 2015, faced with complicated international environment and increasing downward pressure on the economy, the Central Party Committee and the State Council have maintained the strategic focus, comprehensively arranged both domestic and international tasks, adhered to the general work guideline of making progress while maintaining stability, actively adapted to and led the new normal, guided new practices with new theories, strived for new development with new strategies, innovated macro-regulation, deepened the structural reform and pushed forward mass entrepreneurship and innovation,” wrote the NBS.

While the GDP figure was bang on expectation, industrial production, retail sales and urban fixed asset investment growth – released alongside the GDP report – all missed to the downside in December. From a year earlier industrial production grew by 5.9%, down on the 6.2% pace of November and expectations for a moderation to 6.0%. Retail sales growth also decelerated, coming in at an annual rate of 11.1% against expectations for an increase of 11.3%. It was the first month since July 2015 that the annual rate was slower than the month before. Rounding off the trifecta of monthly misses, urban fixed asset investment slowed to an annual pace of 10.0%. The figure, below the 10.2% pace of November, marks the slowest annual increase since the early 2000s.

Aussie is currently being traded around 0.69 area. Pair is likely to find support around 0.68 handle and resistance above 0.6980 level. There will be no major data releases in the rest of the session.

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