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China's factory output logs lower growth
Publication Date : 02-01-2014
China enters 2014 facing slowing growth as factory output expansion slackened in December for the first time in six months.
It underlines the challenges President Xi Jinping will face as he seeks to push through reforms while keeping the world's No. 2 economy on a stable trajectory.
A key manufacturing gauge fell more than expected last month amid weaker export orders and output, data showed yesterday. This suggested that the economy faced headwinds which some analysts say could cause gross domestic product growth to fall to around 7.6 per cent in 2013, the slowest in 14 years.
Growth could ease further this year as Beijing reins in credit growth and local government debt and restructures the economy to improve the quality of growth.
Such reforms are expected to be part of the "grand blueprint" for future development that Xi highlighted in his first New Year's address as China's president on Tuesday night.
China will "make new strides on the road of reform" that can make it "rich and strong" and improve the people's livelihoods, he said in a speech telecast on national TV and radio.
Meanwhile, Taiwan's President Ma Ying-jeou said in his New Year's address on Wednesday that the island needs to end its stalemate with China to boost cross-strait economic and trade cooperation and take its economy to the next level.
Pressures on China's vast manufacturing sector have spiked with the purchasing managers' index easing to 51 last month. While this is above the 50 mark indicating an expansion, it is down from 51.4 in November.
A sub-index for producers' sentiment for the coming months dropped to 49.4 from 54.9, reflecting their concerns.
"Industrial output growth is likely to slow in the future and export growth could also ease, showing the economy still faces some downward pressure," noted Zhang Liqun, an economist at the Development Research Centre.
Still, Xi struck a confident note about the future. "I firmly believe that new glories will be awaiting the Chinese people," he declared, seated in his office - the first time a Chinese president has chosen this backdrop. Previous leaders spoke from a rostrum.
This prompted a lively discussion online as netizens scoured footage of Xi's office for clues to his working style, from his neat rows of books to what looked to be four telephones on his desk.
"The president reads a lot and must be very busy making important calls all the time," observed netizen Gao Fengqi in a post.