China economy rebounds in 2017 with 6.9pc growth

Beijing: China’s economy grew a forecast-beating 6.9 per cent in 2017, picking up steam for the first time since 2010 despite its battles against a massive debt and polluting factories, official data showed on Thursday.
The world’s number two economy eclipsed the official target of about 6.5 per cent and picked up pace from the 6.7 per cent growth seen in 2016, which was the slowest for more than a quarter of a century.
The robust economic expansion indicated stability after slowing down since China last posted double-digit growth in 2010.
“The national economy has maintained the momentum of stable and sound development and exceeded the expectation with the economic vitality, impetus and potential released,” National Statistics Bureau head Ning Jizhe said in a report.
“We should also be aware that there are still difficulties and challenges confronting the economy and the improvement of quality and efficiency remains a daunting task,” Ning said.
The reading — which beat the 6.8 per cent predicted by analysts — comes as China kicks its war on pollution into gear, halving industrial production for some steel smelters and mills this winter. The battle has brought unusual blue skies to Beijing, with the density of dangerous pollution — particulate PM2.5 — dropping by more than 50 per cent in the final quarter of 2017.
But the latest data showed the economy expanding 6.8 per cent in the last quarter of 2017, matching the third quarter figure though it was below the 6.9 per cent from the first half of the year.
Ning dismissed questions on the reliability of China’s statistics raised after the coastal city of Tianjin and the autonomous region of Inner Mongolia admitted to inflating certain 2016 data.
“The system for calculating China’s statistics data is not affected by a small number of places, or some places, or some companies” having accuracy issues with their data, he said. The GDP reading follows strong trade data last week, which showed the humming global economy had propelled China’s export machine.
“This momentum, especially the part fuelled by external demand, may carry on well into 2018,” said Wei Yao, chief China economist at Societe Generale.
The country is also facing pressure to prevent a credit crisis, with local government debt growing 7.5 per cent last year to $2.56 trillion, according to figures released Wednesday.
China has largely relied on debt-fuelled investment and exports to drive its tremendous economic growth of the past four decades but it is now seeking to move its economy to more sustainable consumption-based growth.
The latest figures show the services industry grew eight per cent for the year with retail sales spiking 10.2 per cent, good news for the transition. The International Monetary Fund has repeatedly warned of risks stemming from China’s ballooning debt, saying last year that each extra dollar of debt is producing diminishing returns for China’s economy. — AFP