China’s First GDP Miss in 17 Years

Traditional stimulus is becoming ineffective

For the first time since 1998, China’s GDP came in below the target of the communist regime, rising 7.4 percent in 2014. The Communist Party targeted 7.5 percent, and the market already expected lower growth at 7.2 percent. 

Why is this a big deal? The communist regime needs high growth—at least on paper—to keep the Chinese happy. In 2010 it said it would need 8 percent to keep employment high and avoid social unrest.

“This is a political number now and it has a political narrative. The Party is not making the number up out of thin air. There are economic constraints,” said Leland Miller of the China Beige Book, a research firm specialized in sourcing on-the-ground data in China.

READ MORE

• China Data Expert Leland Miller Confirms Slowdown (Video)
• Amid Failed Promises of Reform, US Companies Leave China
• China’s GDP Growth Insanity: $6.9 Trillion Badly Invested in 5-Year Time
• Beijing’s Interest in Offshore Tax Evasion Limited to Corrupt Officials