I think it's pretty important to point out that the vast majority of Cliffs operations are running quite well, the full year costs in both Asia Pacific Iron Ore and North American Coal decreased significantly and our U.S. Iron Ore costs remain relatively flat year-over-year. Another area of cost cutting success clearly recognized in our results were lower SG&A and expiration expenses.
All of this was a good start but it's not enough, we must be more aggressive in cutting costs especially amidst the volatile pricing environment. Being new to this organization, I have identified two fundamental changes in the way we conduct business that have already been put in motion and will continue to evolve under my leadership.
The first change I believe is a true paradigm shift in the way we apply well defined financial metrics and discipline to our capital spending and future growth. An aggressive growth agenda has come at the expense of returns to our shareholders. Simply put, this is not an acceptable trade-off.
Fiscal restraint with a focus on cash flow generation and balance sheet discipline must guide our decisions. Growth will come in due course, but only after we've demonstrated improved performance with the assets we currently own.
As you saw in our press release earlier this week, we drastically cut our 2014 capital spending budget in fact by more than half to around $400 million. This is largely comprised of sustaining and license-to-operate spending, and approximately $100 million in carryover cash capital from 2013.
Our first priority for any additional cash generated over and above our capital spending and dividend payments during the year will be to lower our net debt position. We will then evaluate a range of options for the next best use of the capital, all of which must have attractive return rates and drive long-term shareholder value.
The second fundamental change is actually just getting back to basics, which includes improving productivity, reducing costs and right-sizing our organizations to meet the businesses immediate needs. This begins with the top layer of management. I have recently initiated a reorganization that will delayer the senior executive team and provide a direct reporting line from the operations management to me. I believe this structure will enhance the speed and quality of our decision-making and drive accountability to all levels within the organization. Additionally, we will continue to streamline the businesses support functions by eliminating duplication and ensuring our resources are directed to the mine, which is where the true value in our business is generated.
Moving to economic considerations, all signs are pointing to solid economic growth in the U.S. in 2014 supported by higher year-over-year motor vehicle production, an uptick in building construction, and other fundamentals, which is expected to support domestic steel production and the related demand for steel making raw materials.
As for China, while growth maybe moderating, we do anticipate annual GDP growth to remain about 7% in 2014, still a strong way of development for the world's second largest economy and one that remains supportive of the broader commodity demand, including iron ore. Although, recent credit tightening measures have constrained growth in the near-term, these reforms would support a stable economy and steady demand for steel making raw materials in the long run.