Chinese economic data strengthens the case for further reform
The National Bureau of Statistics will publish the 2017 economic growth report in Beijing today. Despite question marks over the accuracy of previous government figures, most neutral observers expect the economy will beat the target of 6.5% annual growth despite an expected final quarter slowdown.
The figures come on the back of solid growth data, including 6.8% in the third quarter, led by infrastructure, domestic real estate and external demand. They also come amid President Xi Jinping’s new economic strategy rollout including massive infrastructure spending abroad and controlling financial lending at home.
Today’s official figures will give Xi confidence to ramp up his reform efforts despite the spectre of extremely high debt. Last month, the IMF warned Beijing of the economy’s dangerous levels of debt. Corporate debt was at 165% of GDP and traditionally low household debt had risen by 15% of GDP in five years.
Going forward Mr Xi will likely continue tightening the rules on domestic lending institutions—particularly cutting the risks in investment markets—to make sure China’s growth is sustainable.
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