Chinese economy grew 6.9pc in 2017

BEIJING (AFP) – China’s premier expects economic growth of around 6.9 per cent for 2017, as he saw a “better than expected” outlook for the world’s second-largest economy, state media said yesterday.

The authorities will release official figures next week but Premier Li Keqiang has given his own forecast.

“Over the past year, the Chinese economy has been on a stable and favourable development path, with its overall circumstances better than expected,” Li said in a speech Wednesday at a diplomatic summit in Cambodia, according to the official Xinhua news agency.

The Chinese economy grew 6.7 per cent in 2016 – its slowest pace for more than a quarter of a century.

But the country experienced a rebound in the first half of 2017, posting 6.9 per cent growth over that period, as well as an increase of 6.8 per cent in the third quarter, thanks to soaring credit and investments in infrastructure.

A man wearing an outfit with golden dollar symbols walks down the Bund overlooking the financial district of Pudong in Shanghai. – AFP

In an effort to stem winter air pollution, authorities in recent months have conducted a massive campaign to shut down polluting factories and slash excess industrial capacity, particularly in the north.

According to analysts, the aggressive campaign might have stalled growth in the fourth quarter, due to the slowdown in industrial production.

But Li said, “The annual gross domestic product is expected to grow by around 6.9 per cent.”

His figure is slightly better than the 6.8 per cent forecast by the Chinese Academy of Social Sciences, a top state think tank.

“The crux of why the Chinese economy was able to perform so well is that we insisted on not implementing a flood of stimuli” and instead sought to foster “new sources of growth”, he said.

Beijing seeks to rebalance China’s economic model towards services – which already account for more than 50 per cent of GDP – as well as new technologies and value-added exports, moving away from heavy industries plagued by severe overcapacity and indebtedness.

The investment-heavy and export-dependent model that brought four decades of breakneck economic growth has left the country heavily in debt.