China's Economy Suffers 'Painful' Slowdown
Growth slowed to 7.4% in 2014 as China's continuously expanding property sector proved a big drag on its economy.
Buildings in one of China's 'ghost cities' are lit at night but stand empty
China's economy has expanded at its slowest pace in 24 years.
Statistics published by the Chinese government show that the world's second largest economy grew by 7.4% in 2014 compared with 7.7% in 2013.
The government target of 7.5% was missed but the level was still above market predictions as low as 7.1%.
The slowdown comes as China attempts to rebalance its economy from an export-led market to one which must rely on domestic consumption.A global slowdown means China can no longer rely on its "Made in China" exports.
Chinese government officials see the slowdown as inevitable and say the delicate rebalance represents the 'new normal'.
However it will cause nervousness around the world with economies globally tied into China. Bilateral trade between China and the UK stands at £53bn – a record high.
Wang Jianlan was China's richest man for a period last year
A further breakdown of figures was provided by the Chinese National Bureau of Statistics at a news conference in Beijing.
One of China's few official measures of its unemployment rate put it at 5.1% in 2014. Economists say the true figure is almost certainly higher.
In an exclusive interview with Sky News, the Chairman of Chinese property and entertainment giant Dalian-Wanda, said the slowdown is a "painful" process.
"For China, over the past two years, there has been an obvious decline and slowdown. But in fact this is just an adjustment," Wang Jianlin said.
"Although this year, the economy is slowing down, but there is an obvious improvement in domestic consumption which is increasing much faster than the exports. Of course it's a painful process."
But he added: "Chinese economic growth of around 7% a year shouldn't be a problem. The Chinese economy definitely won't collapse."
For a period last year, Mr Wang was China's richest man.
According to Forbes, he is currently worth £12bn, but has slipped three notches on the Forbes list this year due to lower values for the commercial real estate owned by his Dalian Wanda Group."
China’s property sector has been a big drag on its economy.
In cities all over China, skyscrapers and apartment blocks are shooting up. They’ve been building across China for years: the consequence of government encouragement to borrow and build. But many sit empty; some are only half built.
Sky News visited the central Chinese city of Xianning, which has been officially declared a ghost city.
It’s not deserted. Far from it. 31 million people live in Xianning, but that is only 30% of its capacity.
In other words, 70% of its property lies empty. Tower blocks have been built but nobody has moved in.
It’s a similar picture in cities across China: the legacy of years of credit-fuelled investment have prevented a recession but someone will need to pay for the construction at some point.
China’s Prime Minister, Li Keqiang, once let slip to a US diplomat that Chinese GDP figures are ‘for reference only’.
For the true health of an economy, he said, one must look at things like electricity usage.
China produced 490.2 billion kilowatt-hours (kWh) of electricity in December 2014, up 1.3% on the year.
But how accurate is that figure? The new tower blocks in Xianning are illuminated, but only with neon on the outside.
Inside, they are dark and empty.
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