China: surge in growth in 2017

AFP

AFP

Thursday, 18 January, 2018 04:06

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Thursday, 18 January, 2018 04:11

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BEIJING | China has seen its growth accelerate to 6.9 % in 2017: a burst is expected after you have recorded the previous year, its worst performance since more than a quarter of a century (6.7 %), and a sign of a more favourable environment for the asian giant.

This is the first time since 2010 that the activity accelerated for the second largest economy in the world.

China’s economic growth has also remained resilient in the fourth quarter, to 6.8 %, said Thursday the national Bureau of statistics (cbs), in spite of a huge campaign, anti-pollution, which affected the activity in the last months of the year.

The performance of the gross domestic product (GDP) of China in 2017 is higher by 0.1 percentage point to the median forecast of 11 analysts surveyed by AFP.

The chinese government may feel satisfied. He expected for the full year 2017, a growth much more low “about 6.5%”.

In spite of a reliability highly disputed, the figure of the chinese GDP is scrutinized: China accounts for nearly one-third of global growth.

How do you explain this acceleration in growth in 2017? First of all, the activity was driven by the infrastructure projects, investments in real estate, or an improvement of the international application.

The government has also facilitated the use of credit. This has helped to stimulate the demand of chinese households, at a time when the online business in particular, continues to experience sustained growth.

Retail sales have continued to grow year-on-year, to +10.2 per cent.

Another element that has allowed China to announce GDP growth on the rise: foreign trade — a pillar of its economy — has recovered strongly in 2017. A phenomenon catalysed by the improvement in the economic situation in the United States and in Europe.

After their collapse in 2016, the chinese exports have rebounded by 8% in the past year. In the clear: manufacturing companies, chinese were able to fill the order books.

Rebalancing the economy

But this surge of growth is hampered by various policy measures, monetary and financial taken by Beijing in recent months.

Among these are: the drastic reduction of overcapacity industry ; the tougher measures aimed at controlling debt in china (public and private) which exceed 250 % of the GDP ; and the restrictions in real estate in order to limit the soaring prices in the big cities.

But one of the most spectacular of 2017 has been the campaign against the pollution of the air, recurring in the cities. Beijing imposes in particular for several months in the factories of the north of the country, closures or reductions in production.

Surprise: the slowdown imposed on industrial activity has not had a major impact on the growth of GDP.

The industrial production also remained robust in December (+6.2%) in spite of this campaign. On the set of 2017, it grew 6.6%.

Beijing boasts be happy to rebalancing the economy towards services and consumption, at the expense of investments in infrastructure, exports and heavy industry.

The fixed asset investment, a gauge of infrastructure spending, have, however, inflated by 7.2% for the whole of 2017.

Overall, this series of indicators remain encouraging about the health of the chinese economy.

But the reliability of the official figure of GDP growth is regularly questioned. Experts in China and abroad suspect manipulations in cascade at the local level to bring the economic situation under a better day.