China’s Economy Grows by 6.7%
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.