That should be your first clue, when something as complicated and arcane as the world's second largest economy hits the economic nail on the head. But we will let that slide for now. Reuters reported it this way:
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.
It's this other data you want to pay attention to because there's nothing dashing in these numbers. Rather it's an attempt to release the air slowly to cover up just how bad it is and prevent a stampede of panic in the markets. The answer to the how bad is it is simple: Even the Chinese don't know.
Economists as you'd expect are out in force commenting on the data. Here are some reactions from a WSJ article.
China’s economic growth is unlikely to rebound anytime soon. While the headline numbers match expectations, the detailed figures, such as industrial production, are a bit weaker than expected. Overall, today’s data confirmed the fact that Chinese economic growth is on a downward trend. China’s gross domestic product will likely slow to about 6.6% this year and 6.3% in 2017. The industrial sector is really struggling now. I think the government should further cut taxes to help boost the manufacturing sector. – Zhang Fan, RHB Research
We forecast that China’s growth will slow to 6.4% in 2016, and hit the trough of 6.0% in 2017. A gradual rebound in growth could start in 2018, together with an upward property market cycle and political business cycle. It is still possible that China could achieve an average 6.5% growth during its 13th five year plan (2016-20) provided that the government takes decisive measures to tackle the highly indebted corporate and local government sectors in the coming two years. –Li-Gang Liu and Louis Lam, ANZ Research
The upshot is that while the official GDP figures shouldn’t be taken at face value, growth does appear to have been broadly stable last quarter and the December data, although mixed, don’t suggest that China is now entering a deeper economic crisis. On the contrary, with the tailwinds from recent policy stimulus still gathering we actually expect the data to gradually turn more upbeat over the next few months. – Julian Evans-Pritchard, Capital Economics
Meanwhile, back at the ranch the Nikkei traded up for the first time in four sessions; Australian shares edged higher 0.9%; the Kospi stretched slightly higher 0.6% and The Shanghai Composite Index was up nearly 3%. Gold fell 0.2%, closing at $1,088.80 and Brent crude hit a new 12-year low, most likely owing to Iran's sanctions being mothballed, at $27.70 a barrel.
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