China to post solid steady Q1 growth on building boom but debt risks loom
21 Abril, 2017, 16:48
GDP growth in the first three months, marking the quickest pace since the last quarter of 2015, was 0.1 percentage point higher than the 6.8 percent in the fourth quarter of previous year, the National Bureau of Statistics said on Monday.
Retail sales increased 10.9 per cent from a year earlier in March, compared with a Bloomberg forecast of 9.7 per cent.
Specifically, the investment by the state holding enterprises reached 3,308.7 billion yuan, a rise of 13.6 percent; private investment reached 5,731.3 billion yuan, up by 7.7 percent, 1.0 percentage point faster than that in the first two months, accounting for 61.1 percent of the total investment.
Retail spending increase 10.9%, more than estimated, whereas the fixed-asset investments grew 9.2% in the first quarter of the current year, showing a little improvement from February. The figure is the highest since the third quarter of 2015 and above the government's official target of 6.5%.
China imported the most iron ore on record in the first quarter, but iron ore and steel futures prices are nosediving on fears that its steel production is outweighing demand. Their price hikes were between 0.2 and 0.6 percentage points slower than those in February.
"China's economy is now expanding fairly close to the official rate", Julian Evans-Pritchard of Capital Economics said in a note, adding that the growth "will likely extend into Q2".
Chinese authorities have pledged to enforce strict curbs in most first- and second-tier cities to prevent a housing bubble, while seeking to clear a glut of unsold homes in smaller urban centers.
- China's strong demand for imported industrial commodities such as iron ore and coal has helped drive a reflationary pulse that is contributing to a global manufacturing revival.
According to the economists, heavy investment in property development and infrastructure would be very beneficial to China in long term perspective.
China's economy grew six.nine percent in the first quarter compared to the first three months of past year, beating many economists' expectations.
Mao believes the Q1 data show that China has laid a solid foundation to achieve its full-year economic target, which was trimmed to around 6.5 percent from a range of 6.5 to 7 percent for 2016 to facilitate the country's structural adjustments. The country's total debt rose to 277% of GDP at the end of a year ago, sharply up from 125% at the end of 2008. This page provides - China GDP Annual Growth Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.
China's central bank has also urged banks to strengthen mortgage risk management, and crack down on market irregularities such as making fake divorces to skirt high downpayment fees.