China's GDP growth in 2013 set to be weakest since 1999

China's economy, the world's second largest, may have grown around 7.6 per cent in 2013, its weakest growth since 1999, with latest economic figures indicating sluggish economic activities in the last quarter.

China's latest economic figures, especially the purchasing managers' index (PMI) in both factory activity and the services sector, indicated sagging momentum in December, with the country's growth softening slightly last quarter, economists said.

The National Bureau of Statistics (NBS) is scheduled to release China's macroeconomic data for the fourth quarter and the entire year of 2013 later this month.

China's economy expanded by 7.7 per cent in the first nine months of 2013. GDP growth in the third quarter accelerated to 7.8 per cent from 7.5 per cent in the second.

On December 25, a report submitted by the Cabinet to the parliament said China's economic growth in 2013 is likely to stand at 7.6 per cent. If confirmed, it would be the weakest growth since 1999 in the aftermath of the Asian financial crisis.

Reporting to the Standing Committee of the National People's Congress, the top legislature, Xu Shaoshi, minister of the National Development and Reform Commission said international and domestic economic conditions have changed.

Xu said China's economy faced many problems. Service industries have still to realise their full potential, strategic emerging industries are in their infancy, and industries such as steel, cement, electrolytic aluminum, plate glass and shipbuilding experienced overcapacity.

Financial risks are also looming, with a hefty proportion of debt financing concentrated on public infrastructure projects that only generate low returns in the long run.

There is already oversupply in the manufacturing and real estate sectors, he was quoted as saying by the official Xinhua news agency.

If China fails to handle its government debt properly, "it will easily trigger systemic financial danger", Xu warned.

The PMI for the non-manufacturing sector, a key measure of business activity in the services sector, fell to a four- month low at 54.6 in December, as most industries strived to find new growth engines amid slowing exports.

The PMI figure was released on Friday by the NBS and the China Federation of Logistics and Purchasing (CFLP).

On Wednesday, NBS and CFLP said that the PMI for the manufacturing sector, a key measure of factory activity, had dropped to 51 in December, the lowest since August of 2013.

A HSBC survey, released on Thursday, showed the final reading of China's manufacturing PMI dropped to 50.5 in December from 50.8 in November, mainly due to slower output growth, the report said.