Q1 GDP data sig­nal strength, sta­bil­ity

Trade fric­tion won't dent China's growth mo­men­tum: of­fi­cial

Global Times - - Business - By Ma Jingjing

China’s first-quar­ter GDP data show the econ­omy is strong and sta­ble, a sit­u­a­tion that an of­fi­cial said won’t change amid trade tensions with the US.

The do­mes­tic econ­omy ex­panded 6.8 per­cent year-on-year in the first quar­ter of 2018 to 19.88 tril­lion yuan ($3.16 tril­lion), data from the Na­tional Bu­reau of Sta­tis­tics (NBS) showed Tues­day.

“The GDP data point to sta­bil­ity in the Chi­nese econ­omy, thanks mainly to an ac­cel­er­a­tion in prop­erty in­vest­ment and strong pri­vate con­sump­tion. In­vest­ment growth in the pre­vi­ously strug­gling north­east­ern re­gion ex­ceeded the na­tional av­er­age, re­duc­ing the drag on over­all in­vest­ment. A re­cov­ery in car sales sup­ported a firm­ing in re­tail sales,” Su Yue, China econ­o­mist at the Econ­o­mist In­tel­li­gence Unit, told the Global Times on Tues­day.

First-quar­ter in­dus­trial value added in­creased 6.8 per­cent, down 0.4 per­cent­age point from the Jan­uary-Fe­bru­ary pe­riod. But emerg­ing in­stries and new prod­ucts posted fast growth, with in­dus­trial value added in the tech­nol­ogy and equip­ment man­u­fac­tur­ing in­dus­tries grow­ing 11.9 per­cent and 8.8 per­cent, re­spec­tively. How­ever, the fixed-as­set in­vest­ment growth rate slid 1.7 per­cent­age points year-onyear to 7.5 per­cent in the first quar­ter, ac­cord­ing to the NBS data.

The lat­est fig­ures mean that China's eco­nomic growth has held at 6.7 per­cent to 6.9 per­cent for 11 con­sec­u­tive quar­ters.

How­ever, Liu Dongliang, a se­nior an­a­lyst at China Mer­chants Bank, fore­cast that the full-year eco­nomic growth rate will likely ly drop mod­er­ately, though this year’s tar­get of around 6.5 per­cent can still be achieved.

Chal­lenges for the re­main­der of this year in­clude man­ag­ing what’s ex­pected to be­ex­ces­sively strong in­vest­ment growth sec­tor while en­cour­ag­ing a re­vival in weak in­dus­trial and man­u­fac­tur­ing in­vest­ment, Su saud.

With the cen­tral gov­ern­ment in the ser­vices de­vel­op­ers’ ac­cess to credit and fo­cus­ing on con­trol­ling house­hold lever­age, these prop­erty sec­tor will likely cool later in the year. The cen­tral gov­ern­ment is also tight­en­ing ap-

“The GDP data point to sta­bil­ity in the Chi­nese econ­omy, thanks mainly to an ac­cel­er­a­tion in prop­erty in­vest­ment and strong pri­vate con­sump­tion.” Su Yue, China econ­o­mist at the Econ­o­mist In­tel­li­gence Unit

proval of in­fras­truc­ture projects due to lo­cal gov­ern­ment debt con­cerns, she said.

The Chi­nese econ­omy is re­silient to trade fric­tion with the US and the sound mo­men­tum of the do­mes­tic econ­omy will not be dis­turbed, spokesper­son for the NBS Xing Zhi­hong told a press con­fer­ence on Tues­day.

Due to sup­ply-side struc­tural re­forms and in­no­va­tion­driven strate­gies, China’s eco­nomic growth has shifted from in­dus­try-driven to in­dus­try- and ser­vices-driven, from in­vest­ment-driven to in­vest­men­tand con­sump­tion-driven and from ex­port-driven to ex­port- and im­port-driven.

These changes have greatly in­creased Chi­nese eco­nomic sta­bil­ity, Xing said.

Mean­while, in­no­va­tion has pro­vided great po­ten­tial to the Chi­nese econ­omy.

“China has great ca­pa­bil­i­ties to counter China-US trade fric­tion, as well as var­i­ous risks and chal­lenges, to main­tain sound eco­nomic de­vel­op­ment,” the spokesper­son said.

When asked about the im­pact of es­ca­lat­ing trade tensions with the US on China’s for­eign trade, Xing said that “China never pur­posely seeks a trade sur­plus… China pur­sues bal­anced trade, which also ben­e­fits its own eco­nomic growth.”

In the past two years, China’s trade sur­plus con­tin­ued to con­tract, but ex­ports still grew be­cause China has a com­pre­hen­sive com­pet­i­tive ad­van­tage, he said.

The Chi­nese gov­ern­ment has ex­pressed a firm stance to­ward the trade prob­lem with the US, Xing said, not­ing that China’s open­ing-up has fur­ther ex­panded and the coun­try can main­tain its im­port-ex­port trade bal­ance thanks to the grow­ing com­pet­i­tive­ness of do­mes­tic en­ter­prises.

Photo: VCG

Work­ers at a con­struc­tion site in Fuzhou, cap­i­tal of East China’s Fu­jian Prov­ince in March

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