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18 January 2018
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| China Economy (The Total Investment & Insurance Solutions) |
China's economy gained steam in 2017, expanding at a 6.9 percent pace in
2017 in its first annual increase in seven years, according to data released
Thursday that exceeded economists' forecasts and the government's target.
Buoyant consumer spending and robust exports helped drive the faster
expansion, as the economy defied expectations of weaker growth in the latter
half of the year due to curbs on bank lending.
The data show China's communist leaders have some extra wiggle room as
they strive to wean the economy away from reliance on wasteful and polluting
industries and exports in favor of slower but more sustainable consumer
spending. The rebalancing has been complicated by Beijing's repeated infusions
of credit to prevent activity from slowing too much, which has pushed up debt
that analysts say is the biggest threat to economic stability.
The government had set a target of 6.5 percent growth after the economy
expanded at a 6.7 percent annual pace in 2016, its slowest in 26 years.
Growth in the fourth quarter held steady at 6.8 percent, though that was
a tick slower than the 6.9 percent pace of growth in the first half of the
year, the report said. The Total
Investment & Insurance Solutions
Retail sales rose 10.2 percent in 2017 while exports jumped 10.8 percent
from a year earlier despite heightened trade tensions during U.S. President
Donald Trump's first year in office. The
Total Investment & Insurance Solutions
"The national economy has maintained the momentum of stable and
sound development and exceeded expectations," said the report released by
the National Bureau of Statistics. The
Total Investment & Insurance Solutions
Continued strong demand should help support China's exports, said Louis
Kuijs of Oxford Economics. The Total
Investment & Insurance Solutions
"While domestic demand should cool on tighter financial policy,
China's policymakers want the slowdown in credit and the economy to be gradual.
We project GDP growth to slow to 6.4 percent this year," he said in a
commentary.
The upbeat data underscored debate over the veracity of official
figures, following a recent spate of reports about local Chinese governments
reporting fake or inaccurate economic data. The Total Investment & Insurance Solutions
Earlier this week, Chen Qiufa, the governor of Liaoning province in
China's rust-belt northeast region, admitted that economic figures were padded
out from 2011 to 2014, the official Xinhua news agency reported. Similar cases
have been reported recently by the port city of Tianjin and Inner Mongolia
province.
Such practices have gone on for decades in China. But by understating
the severity of the slowdown in the past five years, officials now may be
understating the scale of the rebound, some economists say.
"We have doubts about the accuracy of the official figures given
how implausibly stable they have been in recent years," Julian
Evans-Pritchard of Capital Economics said in a report, adding that his group's
unofficial measure of activity showed a slower pace of growth but a more
pronounced recovery.
"Admittedly, the monthly data for December, also published today,
suggest that the economy had a relatively strong end to the year," he
added.
The statistics bureau's commissioner, Ning Jizhe, vowed to fix the
problem, though he said the recent cases of fake data were too small to affect
the overall data. The Total Investment
& Insurance Solutions
"The accuracy of China's statistical figures and statistical system
would not be affected by the problems of some individual local (government),
region, enterprise, or unit," he told reporters. The Total Investment & Insurance Solutions
Earlier Thursday, China's foreign exchange regulator said the country's
cross-border capital flows hit a turning point in 2017 as foreign currency
reserve levels stabilized after two years of declines, the country's foreign
exchange regulator.
Wang Chungying, a spokeswoman for China's State Administration of
Foreign Exchange, told reporters in Beijing that the supply and demand of
foreign exchange "have shifted to a basic equilibrium."
China's foreign exchange reserves rose for 11 straight months from
January-December, expanding by a total of $129.4 billion last year to $3.1
trillion dollars, Wang said at an annual briefing.The Total Investment & Insurance Solutions
