China’s Econ­omy Grows by 6.7%

NewsChina - - NEWS BRIEF -

The Chi­nese Acad­emy of So­cial Sciences (CASS), China's high­est State think tank, re­leased its first quar­ter eco­nomic fore­cast re­port on May 14, pre­dict­ing that China's GDP will grow by 6.7 per­cent through­out 2018.

The pre­dic­tion is based on the CASS quar­terly eco­nomic model which shows that China's GDP will grow by 6.7, 6.7 and 6.6 per­cent in the lat­ter three quar­ters. As the Chi­nese govern­ment set the 2018 eco­nomic growth rate at 6.5 per­cent at the two ses­sions, China's an­nual leg­isla­tive meet­ings, in March, the fore­cast in­di­cates that China's econ­omy is de­vel­op­ing as ex­pected.

Thanks to China's sweep­ing sup­ply-side re­forms which have fo­cused on in­dus­trial re­struc­tur­ing and up­grad­ing, Chi­nese in­dus­try has seen an ob­vi­ous im­prove­ment in qual­ity. CASS said. In 2017, the in­dus­trial added value (the net out­put) of the equip­ment man­u­fac­tur­ing and high-tech in­dus­tries grew by 11.3 per­cent and 13.4 per­cent, much higher than the av­er­age growth of in­dus­try as a whole. By con­trast, the added value in min­ing de­creased by 1.5 per­cent and that of the top six en­ergy-in­ten­sive in­dus­tries grew by three per­cent, 2.2 per­cent lower than its growth rate in 2016.

The re­port also re­veals that in 2018, the to­tal so­cial in­vest­ment in fixed as­sets will grow by 3.1 per­cent to 69 tril­lion yuan (US$10.6T), with that in in­fra­struc­ture sec­tor to grow much faster than that of hous­ing and man­u­fac­tur­ing. It in­di­cates that the in­vest­ment in fixed in­fra­struc­ture will re­main a lead­ing spur to China's econ­omy. The re­port con­tin­ues that pri­vate in­vestors' con­fi­dence in fixed as­sets is re­cov­er­ing as their in­vest­ment in this sec­tor is es­ti­mated to grow by six per­cent, 1.5 per­cent higher than that of 2017.

Yet, de­spite the growth, the re­port warns that China's econ­omy is still in a down­turn, with over­ca­pac­ity and high lev­els of en­ter­prise debt con­tin­u­ing to be the two big­gest ob­sta­cles to eco­nomic growth. The re­port pre­dicts that the 2018 CPI (Con­sumer Price In­dex) will be about 1.9 per­cent.

As trade pro­tec­tion­ism is ris­ing through­out the world and China and the US are in con­flict over trade in sev­eral ar­eas, the re­port pre­dicts slower growth in China's ex­ports and im­ports, but it also be­lieves that grow­ing de­mand fol­low­ing the global eco­nomic re­cov­ery and the smooth de­vel­op­ment of China's do­mes­tic econ­omy will buf­fer the unstable fac­tors.

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