China's Economic Growth Last Year Was Even Better Than Expected

Reuters
Updated

China’s economy grew faster than expected in the fourth quarter from a year earlier, helped by a rebound in the industrial sector, a resilient property market and strong export growth.

Official data on Friday showed growth in the October to December period from a year earlier was 6.8%, unchanged from the third quarter and above analyst expectations for 6.7% growth. Growth for the 2017 full year picked up to 6.9% year-on-year, the first annual acceleration for the economy since 2010.

Chinese policymakers have been trying to contain financial risks and slow an explosive build-up in debt without stunting economic growth.

The world’s second-largest economy easily beat the government’s target of around 6.5% for 2017 and quickened from 2016 growth of 6.7%, which was the weakest pace in 26 years.

“China‘s growth is very healthy,” said Iris Pang, Greater China Economist, ING, Hong Kong.

“The risks that we worried about in 2017, for example overcapacity cuts having a negative impact on GDP, did not happen because new sectors are actually coming out to help production to grow.” GDP in the fourth quarter grew 1.6 percent quarter-on-quarter, compared with revised growth of 1.8 percent in July-September, the National Bureau of Statistics said.

The annual pickup in growth comes as the government steps up its crackdown on risky investment and high leverage ratios as well as its fight against pollution.

Despite strong overall growth, there have been signs of weakening momentum in the economy as firms face higher borrowing costs and the government tries to rein in credit.

Growth of fixed asset investment, much of it government-directed, fell to the slowest pace since 1999 at 7.2% last year. China‘s exports and imports growth slowed in December after surging in the previous month, adding to signs of ebbing economic momentum.

Meanwhile, China‘s bank lending halved in December as the government kept up its campaign to curb financial system risks, but banks still managed to dole out a record amount for the year amid the tighter scrutiny.