China GDP forecast to grow 6.5%-6.7% in 2017

2016-11-28 09:40Global Times Editor: Li Yan ECNS App Download

Experts expect economic reforms to deepen to deal with challenges

China's economic growth will continue to advance steadily in 2017, and the country is expected to deepen reforms to tackle remaining challenges, experts said.

Given the sluggish global growth, China's economy is under pressure. Several economic indicators in the first three quarters of 2016 support the view that the country will be able to meet this year's GDP growth target of 6.7 percent, said Tian Yun, director of the China Society of Macroeconomics Research Center.

Tian told the Global Times that the growing Producer Price Index (PPI) in September was a promising sign that the country's industrial deflation has ended.

PPI, which measures the cost of goods at the factory gate, ended a 54-month decline in September, according to data released by the National Bureau of Statistics (NBS) on October 14.

Efforts to help domestic companies deleverage have also gained some ground, Tian said.

On the basis of the current economic trajectory, GDP growth will range from 6.5 percent to 6.7 percent in 2017, he said.

Liu Xuezhi, a senior analyst at Bank of Communications, agreed, saying that China's economy is approaching an inflection point, which means economic growth in 2017 will not slow as it did in previous years, though a rapid recovery is also unlikely. "[The economy] will advance steadily," he told the Global Times.

Liu forecast that "China's GDP will grow 6.6 percent or 6.7 percent in 2017."

Experts said rising infrastructure spending is expected to drive China's economic growth next year.

The country's investment in infrastructure projects rose 19.4 percent year-on-year to 9.5 trillion yuan ($1.37 trillion) over the first 10 months in 2016, the NBS said on November 14.

"Infrastructure investment can contribute to economic growth only if the investment can be transferred into supply and consumed by customers. If not, it just contributes to excess capacity," Tian cautioned.

The services sector will play a vital role in China's economy in the 2017, Liu said.

The added value created by services sector grew by 7.6 percent in the third quarter in 2016. The services sector contributed around 58.5 percent to China's GDP growth in the first three quarters, according a report released on Friday by CMB International, a wholly owned subsidiary of China Merchants Bank.

Other industries such as high-end equipment manufacturing and high technology will help drive economic growth in 2017, Liu said, noting that consumption created by online shopping will also contribute.

However, experts also showed concern about China's economic prospect due to the country's sluggish exports and the uncertainties in the real estate market.

In the first 10 months of 2016, China's exports declined 7.7 percent year-on-year, while imports fell 7.5 percent, according to data from the General Administration of Customs on November 8.

"We'll know that the economy has hit bottom only when China's exports start to see zero growth and then move toward a slight increase," Tian said, noting that "the growth must last one to two quarters, not just one month."

Indeed, recently released home-buying restrictions have reined in the overheated property market, said Yan Yuejin, research director at the E-house China R&D Institute. The goal of the restrictions is to let some air out of a real estate bubble.

That will allow some capital to flow into sectors such as infrastructure, which will boost economic development to some extent, Yan told the Global Times on Sunday.

The domestic property market will possibly cool slightly, but will not experience a sharp fall in the coming year, he said, noting that "housing inventory will be further reduced across the country."

With the goal of achieving medium-to-high speed growth, China is expected to further deepen supply-side reforms and step up efforts to cut industrial overcapacity, experts said.

The Chinese government is expected to adopt prudent monetary policy to counter potential risks in the domestic and international markets, such as currency fluctuations and capital outflows, Liu noted.

The yuan will continue to face downward pressure in 2017, but it is controllable and the currency will not suffer from depreciation in the long term, experts said.



Most popular in 24h

MoreTop news


Travel News
Travel Types
Bar & Club
CNS Photo
Learning Chinese
Learn About China
Social Chinese
Business Chinese
Buzz Words
Special Coverage
Back to top Links | About Us | Jobs | Contact Us | Privacy Policy
Copyright ©1999-2018 All rights reserved.
Reproduction in whole or in part without permission is prohibited.