Marks shift to less heady times
BEIJING - China's annual growth eased to 7.7 percent in the fourth quarter as investment and demand flagged late in the year, and analysts say it could cool further in 2014 as Beijing focuses on rebalancing the economy and other major reforms.
That leaves growth in the Chinese economy at 7.7 percent for all of 2013, unchanged from revised levels in 2012.
The fourth-quarter growth rate compared with 7.6 percent forecast by analysts in a Reuters poll but eased from 7.8 percent in the previous three months.
On a quarterly basis, gross domestic product (GDP) rose 1.8 percent from July-September, slower than expectations for 2.0 percent and a reading of 2.2 percent in April-June.
"The economy may be a little more robust than people thought coming into 2014. I had thought the monetary tightening in 2013 would pose a downside risk in 2013. The numbers reduce that downside risk," said Tim Condon at ING in Singapore.
"I don't see any evidence of an (economic) rebalancing last year. It doesn't look like there's any reduction in the current account surplus and the savings and investment gap probably didn't change."
Still, analysts say activity could cool further this year if China's efforts to increase domestic consumption at the expense of exports and investment gather pace.
Other key risks include policymakers' success in executing reforms and Beijing's prolonged battles to clamp down on risky lending, soaring home prices and a mountain of local government debt.
The Australian dollar firmed slightly after the data while most Asian stock markets pared early losses.
After 30 years of sizzling double-digit economic growth that lifted many millions of Chinese out of poverty but also devastated the environment, China wants to change tack by embracing sustainable and higher-quality development instead.
Any change is expected to come at a cost of more muted economic growth, a price Beijing says it is willing to pay.
Fixed-asset investment in January-December, a main driver of China's economy, rose 19.6 percent, slightly softer than expectations of 19.8 percent.
Industrial output, meantime, grew 9.7 percent in December from a year earlier, slightly less than expectations and moderating from November's 10 percent gain as factories struggled with lukewarm demand at home and abroad.
A Reuters visit to scores of factories in south China this month showed China's manufacturing heartlands have closed earlier than usual this year for the nation's biggest holiday, discouraged by weak orders and rising costs.
Underlining China's subdued domestic demand, growth in retail sales was 13.6 percent, level with expectations and down slightly from November's 13.7 percent.
Sagging growth in investment and domestic demand come at a time when Chinese factories are also fighting fragile global markets. Sales of Chinese exports had underwhelmed last year, missing an official 2013 growth target of 8 percent.
Although many analysts expect China's export business to pick up this year, the country's trade ministry sounded a cautious note this week by saying domestic exporters may have trouble beating their 2013 sales performance this year.