Chinese economy slows to 14-year low at 7.7% in 2013

China's economy growing at its slowest pace in 14 years as Beijing tries to rebalance
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China's economy, the second largest in the world, grew at its slowest pace in 14 years in 2013, official figures show.

China's gross domestic product (GDP) slowed slightly to 7.7 per cent in the fourth quarter, from 7.8 per cent in the previous quarter, according to newly released data by China's National Bureau of Statistics.

The Chinese economy grew 7.7 per cent in 2013, the weakest since 1999, matching the revised figure for 2012, and beating the government's target of 7.5 per cent.

The bureau said the "overall national economic performance showed good momentum of stable and moderate growth" but warned that the "fundamentals of the economy are still not stable".

The World Bank expects the Chinese economy to stay flat at 7.7 per cent in 2014 as Beijing looks to move away from borrowing and policy-induced investment to more sustainable, consumption-led growth.

"We expect the growth momentum to be maintained over in the coming year thanks to the improving external outlook, ongoing reform measures designed to boost private investment and consumption," said HSBC in a note to clients.

The International Monetary Fund has forecast China's growth this year at 7.6 per cent but some forecasters say a figure as low as 7.2 per cent is in the cards.

Societe Generale analyst Wei Yao said: "The growth momentum has  started to weaken and we expect more deceleration ahead, as policymakers have moved to rein in credit growth."

The latest evidence of a slowdown comes after Chinese authorities released new guidelines calling for tighter regulation of bank's off balance sheet lending and trust companies in a bid to curb the nation's shadow banking system. Total debt in the economy has risen to around 200 per cent of GDP, up from 120 per cent six year ago.

Chinese inflation fell to its lowest level in seven months in December at 2.5 per cent, driven by a decline in food prices.