BEIJING: Weakness in the service and farm sectors slowed China’s economic growth in the fourth quarter, despite a strong pickup in construction activity, official data showed on Tuesday.
Services grew 7.4 percent from a year earlier, slowing from 7.9 percent in the third quarter, while growth in agriculture slowed to 3.5 percent from 3.6 percent, the National Bureau of Statistics (NBS) said.
The sector-by-sector breakdown follows release of headline GDP figures on Monday that showed China’s economy in the last quarter expanded at its slowest rate since the global financial crisis due to faltering domestic demand and an ongoing trade war with the United States.
The services sector accounted for almost half of gross domestic product in the quarter by value as China continued to transition toward a service-oriented economy, while agriculture contributed about 10 percent, according to calculations based on the latest data.
Services suffered a broad-based slackening from real estate to tech, as these industries braced for more cautious investor lending and softer consumer demand.
Real estate growth slowed to 2 percent year-on-year in the fourth quarter from 4.1 percent a quarter earlier, as government tightening measures to curb speculation and skyrocketing prices subdued overall demand. The sector contributed 6.4 percent to GDP in the quarter.
The retail and wholesale sector slowed to 5.5 percent from 6.2 percent as consumption of physical goods lost momentum. Auto sales in the world’s biggest car market shrank for the first time since the 1990s.
Though retail sales growth picked up marginally in December to 8.2 percent, the consumer strength gauge is around the weakest in 15 years.
Having been a stellar performer benefiting from supportive policies, the tech sector still grew at a double-digit rate, but growth slowed to 29.1 percent in the fourth quarter compared with 32.8 percent in the third. It accounted for about 3 percent of GDP in the fourth quarter.
Finance was one of the few bright spots in the service sector thanks to recent government stimulus measures to keep liquidity ample.
Construction enjoyed a strong recovery thanks to support for infrastructure projects, as the government frontloaded local government bond issuance to support their financing.
The sector – accounting for 8 percent of the economy – grew 6.1 percent in the fourth quarter, accelerating from the previous quarter’s 2.5 percent growth.