Official data released earlier on Thursday shows that China’s GDP growth rate is in line with the nation’s target of 6.5% for 2017. At 6.8% for July to September quarter, that puts the country’s growth rate on target to meet or exceed its goal for the year.
In a nutshell, bank lending and rise in trade has helped offset debt and the attempted containment of the housing bubble that China is currently experiencing.
Amidst disappointment from foreign companies and analysts regarding the rate at which reform is being carried out, President Xi Jinping has come out saying that economic and financial reforms will deepen, and China would open its markets further to investments from overseas.
On Wednesday, China opened its Communist Party congress, with Mr. Xi saying: “China’s economy has been transitioning from a phase of rapid growth to a stage of high-quality development.”
That translates to a slowdown to a more mature phase of growth, but essentially underlines the fact that the time for rapid growth has passed, and the government is well aware of the shifting trend.
Earlier this month the International Monetary Fund revised its expectations for China by 0.1%, to 6.8%, based on the high-than-expected growth in the previous two quarters.
China’s growth in the first two quarters of the year came in at 6.9%, year-over-year, but Capital Economics China economist Julian Evans-Pritchard says: “A less supportive fiscal policy stance and slower credit growth should result in a slowdown over the coming months.”
All eyes will be on the current and final quarter of the year. But, based on the pace of reform implementation so far, it’s unlikely that even rapid implementation will have any significant immediate effects on 2017 growth rates. As such, the final number is likely to fall between the country’s expectation of 6.5% and the IMF’s forecast of 6.8%.
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