Investors breathe sigh of relief as China’s growth rate holds up

 
Julian Harris
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CHINA’S economy grew at its slowest annual rate in 18 months at the start of this year, yet the level was faster than economists had expected and gave a boost to stocks in Hong Kong.

Official data said that the Asian giant’s economy expanded by 7.4 per cent annualised in the first three months of 2014.

Many forecasts had been for 7.3 per cent growth, or lower.

Fears have risen in recent months over the prospect of a sharp slowdown in the country’s GDP growth, yet the authorities have continued to insist that it will exceed seven per cent expansion each year, despite a programme of rebalancing.

The Hang Seng Index of stocks in Hong Kong edged up 0.11 per cent yesterday, to close at 22,696.01 points.

Yet Nancy Curtin of Close Brothers Asset Management believes that more shocks could be around the corner.

“With personal sector debt now at more than 200 per cent of GDP, stalling growth means China may prove to be a financial accident waiting to happen,” Curtin warned in a note.