China marked its weakest growth in 24 years
China marked its weakest growth in 24 years, after announcing that gross domestic product (GDP) in 2014 grew by 7.4%. For the first time since 1998 the country has failed to achieve a predetermined goal, which was 7.5%. For comparison - in 2013 the growth of the Chinese economy was 7.7 percent. According to IMF forecasts China's GDP growth will slow to 6.8 percent in 2015 and to 6.3% in 2016
The famous Chinese economic model relying on industrial exports, heavy industry, infrastructure investments and real estate is no longer able to generate the same growth rate as before. Two of the main drivers of GDP growth stalled - the property market there is a problem with oversupply, while exports slowed due to the difficult international situation. Serious environmental pollution, pompous bubble in the property sector and the huge debts accumulated by infrastructure investments are only part of the problems facing the government, notes Reuters.
Chinese authorities have already announced that the restriction of monopolies of state companies and industrial overproduction and expensive infrastructure projects is a priority, even at the cost of economic slowdown. President Xi Jinping has repeatedly stressed that China enter into a structural shift to lower, but healthy growth, wherein the promotion of domestic consumption and services will prevail.