Tue Apr 14 21:00:00 CDT 2015

Consensus Actual Previous
Y/Y % Change 7.0% 7.0% 7.3%
Q/Q % Change 1.3% 1.5%

First quarter gross domestic product was up 7.0 percent from the same quarter a year ago as expected. The quarterly pace was its slowest in six years highlighting the challenge of finding new growth drivers amid a slowdown in the key pillars of construction and manufacturing. For the year 2014, GDP was up 7.4 percent after growing 7.7 percent in 2013. The 2014 growth rate was the slowest since the 3.8 percent recorded in the post-Tiananmen chill of 1990. On a seasonally adjusted basis, GDP was up 1.3 percent from the fourth quarter after expanding 1.5 percent in the fourth quarter.

The slowdown is widely seen as necessary and inevitable as the country tries to retool its growth model away from smokestack industries and towards domestic consumption and services. But at the same time, policy makers want to avoid an abrupt slowdown that could cause unemployment to jump and threaten financial stability with a wave of defaults. Expectations that the People's Bank of China will respond to weakening growth with further monetary easing has propelled China's equity market in recent months.

Gross Domestic Product (GDP) refers to the final products at market prices produced by all resident units in a country (or a region) during a certain period of time. GDP is the core indicator of the national accounts, and also an important indicator to measure the economic conditions and the level of development of a country or region. GDP is calculated from three approaches -- production, income and expenditure -- which reflect gross domestic product and its composition from different angles.

GDP is the all-inclusive measure of economic activity. The GDP report contains a treasure-trove of information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. GDP components such as consumer spending, business and residential investment, and price (inflation) indexes illuminate the economy's undercurrents, which can translate to investment opportunities and guidance in managing a portfolio.

The data are compiled by NBS and the People's Bank of China (PBoC). Estimates for non-financial corporations, financial corporations, general government, household and the rest of the world sectors are published. The production accounts, distribution and use of income account, and capital account data are compiled by NBS. NBS also develops the financial account by rearranging financial transactions data in the flow of funds accounts compiled by PBoC. There are no breakdowns of government consumption expenditure, gross fixed capital formation, change in inventories and net exports. Household consumption expenditures are broken down into urban and rural. The income components of GDP are only published in the input-output tables. NBS uses the Chinese Industrial Classification of the National Economy.