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January 25, 2016

Global Economic Analysis and News of Note: Chinese Growth Still Slowing

  • The Chinese economy expanded at a 6.8 percent annualized rate in the fourth quarter 2015, down from 6.9 percent in the third quarter and the slowest rate in nearly seven years. For the full year, China’s economy expanded 6.9 percent – the slowest rate in nearly 25 years. Property investment was up only one percent, a nearly seven-year low, while construction output declined 14 percent. According to Reuters, Guo Lei of Founder Securities said, “Sluggish prices and efforts to reduce capacity in some industries have dragged on industrial performance,” but “In 2016, due to a possible bottoming out of commodities, and easing deflation, an expected stabilization in cyclical sectors could give some support to the economy.” While that analysis was optimistic, the International Monetary Fund said last week that it expects the Chinese economy to expand just 6.3 percent in 2016 and just six percent in 2017.