Hitting a new low, China's economy grew 6.7 per cent year-on-year in 2016, the slowest pace of growth in 26 years, official data showed today. However, it was still well within the government's target range.
According to National Bureau of Statistics data (NBS), growth in the fourth quarter came in at 6.8 per cent, accelerating from the 6.7 per cent in the third quarter.
The government target was 6.5 to 7 per cent growth for 2016, Xinhua news agency reported.
Gross domestic product (GDP) totalled 74.41 trillion yuan (about $10 trillion) in 2016, with the service sector accounting for 51.6 percent.
The data showed that major economic indicators softened last year, with industrial output growth slowing slightly to 6 per cent from 6.1 per cent in 2015.
Urban fixed-asset investment continued to cool, rising 8.1 per cent year on year, compared with 10 per cent in 2015.
Retail sales rose to 10.4 per cent, down from 10.7 per cent in 2015.
Consumption contributed 64.6 per cent to the GDP in 2016, slightly down from the 66.4 per cent in 2015, but remarkably higher than the 51 per cent in 2014, the Global Times reported citing the NBS data.
The service sector contributed 51.6 percent to the economy in 2016, up from 50.2 per cent in 2015 and 48.1 per cent in 2014.
The service sector ratio exceeded 50 percent for the first time in 2015, and hit a record high in 2016.
This represents concrete progress in creating a more consumption and service driven economy in order to sustain growth, and indicates China's economic restructuring is pressing ahead.
The fourth quarter growth that bettered expectations, came on the back of higher government spending and massive credit stimulus through record bank lending, that will fuel China's explosive growth in debt.
It is estimated that China's government and private sector debt will cross 285 per cent of its GDP this year.
In 2016, credit expanded to 16 per cent more than in 2015, and total debt grew nearly 2.4 times China's GDP.
Chinese corporate debt has risen to 169 per cent of GDP, while international institutions have been urging China to deal with the problem of over-leveraging in order to avoid a financial crisis.
The mounting international concern is based on the fact that as the second largest economy in the world, a Chinese financial crisis would greatly impact the world economy.
Coming into the new year, the boom in China's property market has abated, even as many local governments in the country have brought in regulations to curb speculation in real estate.
Earlier this month, China's planning body the National Development and Reform Commission also estimated the economy to have grown about 6.7 per cent in 2016. The Chinese economy registered the same growth rate in the first, second and third quarters last year, it said.
(With IANS inputs)
