Analysts expect that the manufacturing and investment growth seen in China will have waned in December. Momentum is seen to be slowing down as 2014 forecasts for growth expansion are at the lowest levels seen in a quarter-century. The Communist Party has been trying to shift to a more stable growth trajectory by limiting the volatile, speculative growth seen in years past. Premier Li Keqiang has mentioned last year that markets should expected a slower pace of growth as it transfers to a stabilized economy. Yet, it does not stop the markets to focus on the dwindling expansion.
Industrial production has slowed to a five-month low to 9.8 percent, and the gross domestic product seen an expansion of 7.6 percent in the October-December period. General consensus is that China will slowdown to 7.4 percent growth in 2014, but Premier Keqiang indicated that employment may not hold up if growth dips below 7.2 percent. Li Wei, economist at Standard Chartered PLC., said “the whole dynamic of economic growth is weakening — this is an indisputable fact.”
Fixed-income investment, excluding rural areas, is expected to increase 19.8 percent for the years, but is lower by a tenth percent from the January-to-November period. This is would be the lowest full-year rate since 2002.
The People’s Bank of China (PBOC) is aiming to reduce the amount of easy credit that has grown exponentially over recent years, and data showed a record drop in the last six months in new credit. According to the National Audit Office, local-government debt ballooned to 17.9 trillion yuan.