China maintains strong growth and reform momentum - World Bank

Economic growth in China remained strong in 2017, supported by rising household incomes and improving external demand, according to World Bank's report, China Economic Update, which was released in December. The World Bank projected China's growth to reach 6.8 percent in 2017, exceeding initial expectations.

“China has maintained its growth resilience and gained reform momentum. The authorities have undertaken a host of policy and regulatory measures aimed at reducing macroeconomic imbalances and limiting financial risks without notable impact on growth,” said John Litwack, World Bank Lead Economist for China. “As a result, 2017 has been a successful year for China on many fronts. Economic rebalancing received a boost – the growth of household incomes and consumption accelerated this year relative to investment.”

The recovery in global trade has been an important factor that supported economic activity in China in 2017, with net exports contributing positively to growth for three consecutive quarters, compared to a negative contribution in 2015-2016. Business confidence has improved as well, job creation remains buoyant, capital outflows have stabilized, and the Renminbi has appreciated against the US dollar, the Update says.

China's GDP growth is expected to decelerate to 6.4 percent in 2018 and 6.3 percent in 2019 mainly because of domestic policy tightening. Prudent monetary policy, stricter financial sector regulation, and the government's continuing efforts to restructure the economy and rein in the pace of leveraging all contributing to the growth moderation.