China's economic growth fell to a six-year low of 7 percent in the first quarter, buffeted by sharp declines in industrial production and real estate construction, according to government data released Wednesday.
Economic figure released by the National Bureau of Statistics also showed that industrial output growth dropped to a post-crisis low of 5.6 percent in March, down from 6.8 percent in the first two months of the year and from 7.9 percent in December.
Growth in consumption, weak in realty: RBS
According to Louis Kuijs, chief economist of greater China of the Royal Bank of Scotland in Hong Kong, GDP growth slowed reflecting downward pressures from real estate weakness and lower export growth.
However, Kuijs and the RBS expect the Chinese economy to end 2015 on a good note and that the weakness in the economy was cushioned by solid growth in consumption.
The released data also revealed that fixed-asset investment growth dipped to a historic low of 13.5 percent in the first quarter, compared with the average of 15.7 percent last year, showing further weakness in the manufacturing and property sectors.
Year-on-year retail sales growth in March slowed to 10.2 percent, the lowest level since March 2006, compared with 10.7 percent in the first two months.
Tight monetary conditions: Bloomberg
Bloomberg economists Tom Orlik and Fielding Chen offered a harsher view on the numbers, citing that the data paints a dreary picture for the state of the economy.
Orlik and Chen point out that while the government reached its 7 percent target, monthly output data point to a troubling loss of momentum and investment, exports and consumption are all slowing. The also indicated that inflation is low and credit expansion is weak.
Breaking the numbers down, according to Orlik and Chen, retail sales have slowed down and are impeded by concerns about wage growth. The duo also say that the crackdown on corruption is having an impact on spending based on the falling gaming revenue in Macau and jewelry sales in Hong Kong.
According to the duo, weak export data is a blow to competitiveness of a stronger yuan and the lackluster recovery of major trader partners such as the US.
Despite all the negative signs, all three economists expect the government to continue and maybe further ease policies to ensure that growth in the coming months will remain around 7 percent.
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