Stagnant growth adds to pressure for rebalancing of China's economy

Beijing may need to take action to stabilise the economy after growth last year narrowly avoided hitting a 14-year low.

National Bureau of Statistics chief Ma Jiantang suggested a fresh injection of government-led investment was necessary after revealing the gloomy data yesterday. The world's second-biggest economy managed 7.7 per cent growth last year - level with the figure for 2012, which was the lowest since 1999.

The news dented share markets around the region as investors factored in the risk of slowing growth in the next 12 months. European markets barely moved.

While gross domestic product growth topped Beijing's official 7.5 per cent target, other data showed cooling factory growth, with industrial production rising 9.7 per cent last month against 10.3 per cent a year earlier.

That could complicate efforts to deepen structural reforms the leadership has said are vital to rebalance the economy. It wants to move away from exports and investment towards more sustainable domestic consumption.

But it may now be forced to rely on investment-driven policies to keep employment steady and incomes rising.

"Investment growth is likely to maintain steady progress as China pushes forward urbanisation, expands infrastructure building in the central and western regions, continues with shabby-town reform and develops energy-saving and environment-protecting industries," Ma said.