China's economy grew at its weakest pace in a quarter of a century last year, raising hopes Beijing will cushion the slowdown with more stimulus policies. As Laura Frykberg reports, that gave markets a welcome boost.
Good news for investors, but not for China's economy. Shares have soared in Europe and Asia on the back of the country's weakest GDP figures in decades. Official figures put China's annual growth at 6.9 percent. ETX Capital's Head of Trading, Joe Rundle. (SOUNDBITE) (English) ETX CAPITAL'S HEAD OF TRADING, JOE RUNDLE SAYING: "I think that the market was bracing itself for a particularly bad figure and people are just closing positions on this so that is why we are seeing a bounce up in the share market." China's slowdown - and a slump in oil prices - have hit global markets since the start of the year. The International Monetary Fund has just cut its global growth forecast as a result. Near seven per cent growth may seem high to many but there were other worrying signs. Industrial output for December missed expectations. Retail sales growth and investment was aso weaker. Enzio Von Pfeil is an investment strategist in China (SOUNDBITE) (English) INVESTMENT STRATEGIST AT PRIVATE CAPITAL LIMITED, ENZIO VON PFEIL, SAYING: "It does herald a very severe slowdown in the Chinese economy, and that's really the point of this. Forget the numbers, look at the trend, and the trend is saying severe slowdown." Investors also see the slowdown prompting more stimulus policies. But it'll take a while for China to readjust its economy. (SOUNDBITE) (English) ETX CAPITAL'S HEAD OF TRADING, JOE RUNDLE SAYING: "We are going to see a long-term restructuring to a consumer-led economy but there still will be some heavy manufacturing in China for some time to come." China's markets ended the day up 3 percent - but they were still around 15 per cent lower than the start of the year.