Is China’s economic boom over? Beijing reports slowest growth in 24 years

The economy grew at a pace of 7.4 percent -- a rate that would be great for just about any other nation, but not so good for an economy that had experienced double-digit increases in recent years.

The Chinese economy got off to a weak start in 2015 after worse-than-expected manufacturing and service sector performance, which may prompt the government to boost attempts to spur growth in the coming months.

It was the first contraction on China’s factory activity in more than two years, the services sector also showed slow growth, worrying investors, according to a Wall Street Journal report.

Ma Xiaoping, an economist at HSBC, said the results show that demand from the corporate sector remains sluggish, and the liquidity injections and interest rate cuts had only had a limited effect on the economy.

The government may need to weigh more targeted measures to boost the economy if the results continue.

China’s official manufacturing purchasing managers index dropped to 49.8 in January, down 0.3 from December. That is the index’s first dip below 50 since September of 2012. A reading below that level indicates that the index that there has been a contraction since last month.

It was a disappointing result for the second largest economy in the world, which is still trying to regain its recent expansion rate. The economy expanded at its slowest pace in 24 years in 2014, growing 7.4 percent — a solid performance for just about any other economy, but a big miss from the double-digit levels China had been experiencing in recent years.

Economists blamed a sluggish real estate market and low domestic demand. The global economy also remains weak, dragging down Chinese growth.

It may be the end of China’s massive growth, and the nation may need to adjust to this kind of pace as the norm, some economists have argued.

The government is expected to lower its growth target to 7 percent, a 0.5 percent decrease from its growth target for 2014. Beijing has been attempting to speed up approvals o infrastructure projects and approve tax breaks to boost the economy, and the central bank cut interest rates in November for the first time in years. It also conducted some short-term credit injections to jump start growth, but it wasn’t enough in 2014 and is so far not doing enough in 2015.