LINE

Text:AAAPrint
Economy

Morgan Stanley raises forecast on China's GDP growth

1
2017-11-29 23:35Xinhua Editor: Wang Fan ECNS App Download

Morgan Stanley has revised its forecast on China's GDP growth as it believes ongoing reforms, including excess capacity cuts, are improving the quality and structure of the economy.

The New York-based investment bank predicted the economy will expand by 6.8 percent year on year in 2017 -- up from a previous forecast of 6.6 percent -- and by 6.5 percent in the next year, also better than the 6.4-percent initial projection.

It attributed the bullish stance to better economic quality and progress in China's key transitions.

Robin Xing, chief China economist with Morgan Stanley, highlighted robust consumption and improving private investment during a press briefing Wednesday.

"Consumption upgrades in third- and fourth-tier cities, along with services and the new economy, will continue to create jobs and drive growth in incomes," Xing said. "Meanwhile, despite a slowing public sector, private firms have become more active in making investments, with a larger share investing in high-tech industries."

China is weaning itself from reliance on investment in commodities and infrastructure and turning to the tertiary sector and consumption to sustain growth momentum, which have grabbed bigger and still-increasing shares of the economy.

"Consumption's contribution to GDP growth will reach a new high of more than two thirds in the next year," Xing said.

Xing also cited other positive factors in China's economy, such as exports propped up by a global recovery, inflation dynamics that remain healthy with warming consumer prices and stabilizing factory-gate prices, progress in eliminating outdated capacity, and international patent applications that rank second globally.

Still, challenges exist, but Morgan Stanley said problems ranging from debt to deflationary pressures are actually improving and will remain under control.

"Policy tightening and related financial sector clean-up policies have helped to control financial risks," the bank said in a research note, pointing to deleveraging in the corporate sector and slower growth in debt.

"The pace of the increase in overall debt to GDP has moderated to 4 percentage points so far in 2017, as compared to the cumulative 42 percentage points over both 2015 and 2016," according to the note. Xing projected the debt to GDP ratio will cap by the second half of 2019.

Morgan Stanley has maintained its long-term optimism on China and expects it to avoid the middle-income trap to gain high-income status with per capita national income to exceed 13,700 U.S. dollars by as early as 2025.

  

Related news

MorePhoto

Most popular in 24h

MoreTop news

MoreVideo

News
Politics
Business
Society
Culture
Military
Sci-tech
Entertainment
Sports
Odd
Features
Biz
Economy
Travel
Travel News
Travel Types
Events
Food
Hotel
Bar & Club
Architecture
Gallery
Photo
CNS Photo
Video
Video
Learning Chinese
Learn About China
Social Chinese
Business Chinese
Buzz Words
Bilingual
Resources
ECNS Wire
Special Coverage
Infographics
Voices
LINE
Back to top Links | About Us | Jobs | Contact Us | Privacy Policy
Copyright ©1999-2018 Chinanews.com. All rights reserved.
Reproduction in whole or in part without permission is prohibited.