China’s economic growth beat expectations in 2017; reversed seven years of downward trend

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A file shot of Shanghai. Photo courtesy: Asian Development Bank

China’s economy expanded by 6.9 percent in 2017, beating expectations and reversing a downward trend for the first time in seven years, government data showed.

The gross domestic product (GDP) expansion of the world’s second-largest economy was higher than the 6.7 percent growth in 2016 and well above the official target of 6.5 percent, according to data from the National Bureau of Statistics (NBS).

“Major macroeconomic indicators all beat market expectations, pointing to economic stabilisation,” the official Xinhua news agency quoted Ning Jizhe, head of the NBS, as saying.

Growth in the fourth quarter came in at 6.8 percent, unchanged from the rate seen in the third quarter, Xinhua said, adding that the totalled 82.71 trillion yuan ($12.84 trillion dollars) in 2017 with the service sector accounting for more than half of the total.

Consumption was the major growth driver, contributing 58.8 percent to GDP growth last year, which was also helped by robust trade that reversed a downward trend seen in the previous two years and contributed about 9 percent to GDP expansion in 2017.

A breakdown of the data showed improved economic structure, with new growth drivers emerging and outdated capacity fading.

New-energy vehicles, industrial robots, solar power and integrated circuit outshone most other industries in terms of output, growing 51.1 percent, 68.1 percent, 38 percent and 18.2 percent, respectively, year on year, contributing to a pick-up in industrial output growth in 2017.

On the other hand, mining and cement sectors saw their output decline 1.5 percent and 0.2 percent, respectively, while the textile and coal industries only grew 4 percent and 3.2 percent, respectively, Xinhua reported.

Private investment reached 38.15 trillion yuan, up 6 percent year on year, 2.8 percentage points faster than the previous year, accounting for 60.4 percent of the total investment, it added.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He also advises companies on thought leadership imperatives.

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