“China Bulls may ultimately look back fondly at 2017 as a pivotal year. China’s economy once again defied gravity, with real GDP growing 6.9% y/y in the first three quarters of 2017, compared to 6.7% in full-year 2016 and the government’s “official target of around 6.5%”. More importantly, Chinese policymakers began to tackle financial stability risks emanating from the economy’s heavy reliance on leverage since the Great Recession.”  (Art Woo, Will Financial Stability Remain a Top Priority in 2018?, BMO report, Jan. 5, 2018)

China’s government announced that the rate of growth in the country’s real GDP increased slightly last year, for the first time in seven years. Although many economists doubt the veracity of China’s official macroeconomic numbers, nonetheless there is some confirming evidence that China’s economic growth rate was actually stronger in 2017 than in 2016.

According to the official figures, exports, construction and consumer spending all rose rather strongly last year. In theory, improved growth offers the government some new room to tackle an accumulation of serious financial, environmental and social problems this year.

But China’s growth has come at a high price – increased borrowing has triggered downgrades of China’s sovereign debt rating by credit rating agencies; there are severe pollution problems in China’s air, water and soil; and of course, the persistent social problems associated with the movement of tens of millions of workers to cities who had little choice but to leave their children in their hometowns

China’s Economic Growth Outlook According To The World Bank (Update, Dec. 2017)

Print Friendly, PDF & Email