China eyes 6.8% annual growth
ECONOMY First full-year acceleration since 2010
BEIJING/SHANGHAI • China’s economy is poised for its first full-year acceleration since 2010, the year its gross domestic product surpassed Japan’s to become the world’s second-largest.
Data due Thursday will show the economy expanded by 6.8 per cent in 2017 from a year earlier, according to Bloomberg’s survey.
Economists, whose growth estimates weren’t optimistic enough before three of the last four quarterly releases, may have another surprise in store, according to hints from one source. Premier Li Keqiang said earlier this month that t he 2017 expansion was about 6.9 per cent, citing better- than- expected exports, fiscal revenue, household income and corporate profits.
“The Chinese economy seems to have ended 2017 on a stronger footing than we initially expected,” Yao Wei, chief China economist at Société Générale SA in Paris, wrote in a note this month. “This momentum, especially the part fuelled by external demand, may carry on well into the new year.”
Meanwhile, after tightening the Communist Party’s grip on state- owned enterprises, President Xi Jinping’s administration is signalling an increasing presence in private companies.
Xi has called state enterprises the “backbone” of China’s socialist economy. But most of the giants were founded before the boom in technology-driven industries over the past two decades. That’s created a large swath of the economy that’s largely private — tech and consumer champions like Alibaba, Tencent and Baidu, along with innovators in sectors from finance to automation. Now, SOEs are on track to take stakes in private companies.
“China wants to maintain state control over every aspect of the national economy, and it needs to keep up with the changes in the economic structure,” said Chen Li, a Hong Kong-based equity strategist at Credit Suisse Group AG.
Much of the overhaul of state- owned enterprises under Xi has focused on a consolidation in the hundreds of sprawling units across the country, such as those that have reshaped shipping and train- making industries. But a lesser-noticed part of the broad “mixed ownership” initiative features SOEs being encouraged to take stakes in private companies.
This part of the initiative has yet to gather pace, though equity strategists anticipate moves to come. They would showcase how China continues to develop i ts own path toward developednation status — not entirely state dominated, but with more control by political authorities than in countries like France that have nurtured state champions.