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China’s Economy is Hopefully to Perform with a Mid-to-High Smooth Growth
2017-05-02
By Zhang Liqun, Research Fellow and Deputy Inspector of Macroeconomic Research Department, DRC China Economic Times，
2017-03-10
The world economic recovery will be sluggish and unstable across the board in 2017 as the world economy is experiencing a trend of de-globalization along with the looming up of various forms of trade protectionism and trade barriers. Generally speaking, China’s export performance is not at all promising in 2017. But due to the low baseline figures, the efforts for steady export will gradually pay off and industrial transformation and upgrading have sharpened China’s export competitive edge. As a result, China’s export is expected to go up at a low level in 2017.
China’s investment in 2017 is expected to show a steady growth trend. First, a number of major projects have accumulated adequate funds for new-type urbanization drive and the Belt and Road Initiative; some local governments have gained relevant experience in terms of issuing bonds to replace outstanding debts and using PPP (public-private-partnership) model for fund allocation. On this basis, infrastructure investment is expected to continue to maintain a relatively strong growth. Second, the promotion of new-type urbanization drive will gradually improve the real estate development environment, and provide continuous support for demand. Given the facts that the increase of real estate construction projects is significantly slower than the resumption of market sales volume, the number of unsold homes has continued to decrease in some most sought-after cities, real estate businesses boast abundant funds and land supplies in some key cities will increase, it is predicted that real estate investment will maintain an overall steady growth trend. Bolstered by infrastructure and real estate market input, the investment of manufacturing industry in 2016 stopped decreasing and became stabilized and will resume an increasing momentum in 2017. In general, the investment in 2017 will maintain a steady growth, beyond the level of 2016.
Despite the fact that the changes of demands in housing and cars will probably influence consumption growth, consumption will keep a steady rising trend in 2017, which will shore up economic operation in a smooth manner.
Based on the above analysis, China's economic growth is expected to be generally stable in 2017, similar to the performance in 2016. According to the market demand recovery and supply and demand changes, the price level will inch up and CPI is expected to increase between 2% - 3%.
