102347970-China_economy_smurfs.530x298China’s economy grew at its slowest pace in 24 years in 2014, official data showed on Tuesday, undershooting the government’s target for the first time since 1998. Gross domestic product (GDP) expanded 7.4 percent from 7.7 percent in 2013. Government targets have been for a print of “around 7.5 percent.” Growth in the world’s second biggest economy has not fallen below 7.6 percent since 1990, when it grew 3.8 percent as a result of international sanctions in the wake of the Tiannanmen Square massacre. Fourth quarter GDP came in at 7.3 percent from the year-ago period, beating the 7.2 percent forecast by analysts and holding steady from the prior quarter. The Australian dollar strengthened on the news, trading briefly above $0.82, and touched 97.02 against the yen. China’s Shanghai Composite index widened gains to 1.3 percent, while Hong Kong’s Hang Seng index held on to a 0.5 percent gain. In other data, retail sales for December rose 11.9 percent from the year ago period, beating forecasts for 11.7 percent, while industrial output climbed 7.9 percent on-year, better than the consensus print for 7.4 percent. Growth in China’s real estate investment, meanwhile, slowed to 10.5 percent in 2014 from a year earlier, while revenues from property sales dropped 6.3 percent on an annual basis, underscoring the weakening housing sector. “[The data] was pretty much slightly stronger than expectations across the board. Retail sales surprised slightly on the upside, industrial production was pretty firm. The GDP number was just a tad higher. The authorities should be pleased with the number and I think we needed some good news after the drop on Shanghai Composite yesterday,” said Jonathan Pain, author of The Pain Report. Chinese stocks plunged nearly 8 percent on Monday, after the country’s securities regulator rapped three major brokerages for continuing to lend money for stock purchases in violation of rules. China’s economy has been grappling with a slowing property market, a deflationary environment and chronic overcapacity problems in recent years. Policymakers cut interest rates in November for the first time since 2012, surprising markets as the government has repeatedly signaled its tolerance for slower growth with the economy transitioning from reliance on investment and towards domestic consumption. “I still think the central bank will ease policies as well as a cut in the triple R rates. The bottom line is that China still has a credit issue and we are seeing a deflation [which] the authorities are still trying to manage that. I see oil prices paving the way for a more accommodative stance by the central bank this year,” Pain said. Many economists are expecting Beijing to set its growth target for 2015 at around the 7-percent level. “With growth moderating in China, the next phase of the country’s economic prosperity is being mapped out through fiscal regulation and sustained growth targets,” said IG’s Evan Lucas. “Those ideas mean the central government is also looking to moderate rampant speculation, encourage sustained growth for domestic demand and ensure private enterprise becomes more self-sufficient. Full Story