China fourth-quarter growth weakest since 2009 as policy misstep fears grow

Tue Jan 19, 2016 6:29am EST
 
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By Kevin Yao and Xiaoyi Shao

BEIJING (Reuters) - China's economic growth in the fourth quarter slowed to the weakest since the financial crisis, adding pressure on a government that is struggling to restore the confidence of investors after perceived policy missteps jolted global markets.

Concerns about China's policy making ability have shot to

the top of global investors' risk lists for 2016 after a renewed plunge in its stock markets and yuan currency stoked worries that the economy may be rapidly deteriorating.

After being a major locomotive of international growth for decades, China is locked in the midst of a protracted slowdown, leaving the United States as the only main driver of the global economy.

Weak exports, factory overcapacity, slowing investment, a soft property market and high debt levels are all compounding problems for the government as it tries to transition from a centrally planned economy to a more market-oriented model that will require leaders to cede a large degree of control.

Growth in fourth-quarter gross domestic product (GDP) eased as expected to 6.8 percent from a year earlier, down from 6.9 percent in the third quarter and the weakest pace of expansion since the first quarter of 2009.

Full-year growth of 6.9 percent, enviable by Western standards, was China's poorest showing in quarter of a century.

Other data on Tuesday suggested the world's second-largest economy lost more steam in December, dashing hopes that a year-long flurry of government stimulus would finally kick in.   Continued...

 
Employees work at a food processing factory in Yichang, Hubei province, January 17, 2016. REUTERS/Stringer