China’s economy has grown at its slowest rate in more than a quarter-century as Beijing braces itself for an uncertain outlook that could see a trade stand-off with Donald Trump.
After a tumultuous start to 2016, the country’s leaders used huge monetary stimulus to steer the world’s number two economy to hit their annual target and also record the first quarterly pick-up in two years.
The Asian superpower is a crucial driver of global growth but Beijing is trying to reduce its heavy reliance on exports and state-backed investment and instead focus on domestic consumer spending to drive expansion.
However, the transition has proved bumpy, with the crucial manufacturing sector struggling in the face of sagging global demand for its products and excess industrial capacity left over from an infrastructure boom.
This led to the economy growing 6.7% last year, in line with forecasts but down from 6.9% in 2015, and the worst reading since 1990. The government targeted 6.5-7.0%.
The October-December increase of 6.8% also marked the first quarterly improvement since the final three months of 2014.
The national statistics bureau called the figure a “good start” for the government’s goal of achieving 6.5% annual growth through to 2020.
“China’s economy was within a proper range with improved quality and efficiency. However, we should also be aware that the domestic and external conditions are still complicated and severe,” the bureau said in a statement.
It added that the coal and steel industries had cut overcapacity, but structural reform should be the “mainline” this year, urging policymakers to focus on “fending off risks” to stability.