China’s first-quarter GDP growth rate for 2015 was the slowest since 2009 with its economy expanding at 7%, down from 7.3% in the last quarter of 2014, data showed on Wednesday.
Though China’s National Bureau of Statistics (NBS) said it was better than what was forecast by many organisations — that the growth rate would fall below 7% — the slowdown could mean further easing of monetary policies, and signify that days of China’s growth at a breakneck speed were over.
As wages grow, manufacturers shift out of China and demand for its goods slow down across the globe, analysts say the slowdown in the world’s second-largest economy was on expected lines.
“One main reason is that old economic cycle is no longer operational. The coastal areas of China were rich in capital, full of labour-intensive industries. Products were exported to developed countries. After the 2008 crisis, this slowed down,” Hu Shisheng from the China Institutes of Contemporary Relations (CICIR), said.
“Then, labour force has reduced dramatically. In coming years, 2-3 million reduction in the labour force is expected. Then the price of labour force has also gone up,” Hu said.
For doing the same job, a Chinese labourer in south China gets $292 per month. The same job is being done in Vietnam for $150.
The government, however, put on a brave face, with NBS spokesperson Sheng Laiyun attributing the slowdown to sluggish global economic recovery in the post-crisis period.