Today is:2017-08-21
International institutions raise expectations on China’s economic growth to highlight its economic development potentials
 
Release time : 2017-08-04
 
   
Recently, National Bureau of Statistics released the macro economic data in the first half. The main indicators are better than those expected, showing an improved stability of macro economy. Due to this, International Monetary Fund(IMF), Asian Development Bank(ADB), JPMorgan Chase & Co. and other international organizations and institutions raised expectations on China’s economic growth to highlight its economic development potentials. They believed that China’s economy re-balance progress was steadily pushed forward and China’s economic prospect had a strong support.
According to the 1H17 national economy data released by the National Bureau of Statistics on July 17, China’s GDP reached 38.1490 trillion yuan in the first half, up 6.9% year on year based on comparable prices.
IMF immediately released the updated World Economic Outlook Report and increased China’s economic growth 0.1 and 0.2 percentage point for this year and next year to 6.7% and 6.4% respectively. It is IMF’s third increase for China’s 2017 economic growth prospect.
Quite a few other international institutions increased their prospects. JPMorgan Chase & Co. and Nomura Securities adjusted the prospect on China’s annual economic growth rate from 6.7% to 6.8%. ADB improved China’s GDP growth rate from 6.5% and 6.2% to 6.7% and 6.4% for 2017 and 2018, respectively. Standard Chartered Bank regulated the forecast on China’s 2017 economic growth from 6.6% to 6.8%, and estimated that China hopefully had the first accelerated growth since 2010.
Also, Citibank improved China’s economic growth rates of the third quarter and fourth quarter of 2017 from 6.5% and 6.4% to 6.7% and 6.6% respectively, and the annual GDP growth from 6.6% to 6.8%. After interviewing 56 economists, Bloomberg believed that China’s economic growth in Q3 and Q4 would be 6.7% and 6.6%, 0.1% higher than the previous forecast. The upward regulation on China’s economic growth by international organizations and institutions is based on Chinese economy’s 2Q performance beyond their expectations. In its Asian Economic Outlook, ADB mentioned that the 2Q economic data outperformed the expectation and the growth rate was increased thereby. Nomura Securities said that the 2Q economic momentum was higher than expectation and the June’s economic data were good.
In addition, international institutions and organizations made further in-depth analysis on China’s economy, and affirmed the economic trend of stable performance with good momentum for growth. According to ADB’s report, the stable growth of residents’ income and the continuous expansion of public expenditures support the continuous positive development of domestic consumption. Prices of some goods moderately bounced from the bottom of 2016. Together with the pickup of foreign demands, the imports and exports rebounded in the first half.
JPMorgan Chase & Co. had similar analysis: despite of the possible impact to China’s economy of the investment slowdown of infrastructure and real estate and the financial deleverage, generally speaking, the stable expansion of consumption and services and the continuous rise of private investment still offer support to the active prospect of China’s economy this year.
In general, international institutions believed that the steady expansion of consumption, foreign trade and service industry as well as the stability and pick up of private investment are good support to China’s economy, and thus increased the prospect on China’s economic growth due to the good performance from a macroscopic and moderately macroscopic view.
Multiple data indicate that China’s economic development runs in a stable scope. Data from National Bureau of Statistics indicate that the consumption expense in the first half contributed 63.4% to economic growth, ranking the highest among three driving forces. Data from General Administration of Customs indicate that China’s total foreign trade increased 19.6% year on year in the first half, a record high of its kind since the second half of 2011.
However, international institutions also thought uncertainties still exist in China’s economy. For instance, Nomura Securities said that the decline of real estate’s sales growth rate in the second half may bring downward pressure to economy, and the disturbance of geographical factors, fluctuation of RMB exchange rate and fall of liquidity and monetary indicators from the high will produce downward pressure to export.
According to The Australian Financial Review, the risk obsession may make many observers ignore opportunities of China’s economy. The 6.9% GDP growth in Q2, the high confidence of consumers and the robust fixed assets investment show the energetic momentum of China’s economic development. China’s economy has risks, but has more opportunities.
Uncertainties of external environment and investment slowdown will not have great influence to China’s economic development in the second half, said Zhang Jianping, director of Regional Economy Cooperation Research Center of Chinese Academy of International Trade and Economic Cooperation of Ministry of Commerce. As China had obvious growth in foreign trade in the first half and laid a sound foundation for economic growth, we’ll have no problem to realize active foreign trade growth in the whole year. It is expected that the macroeconomic growth this year will be better than that in last year. Data analysis by international institutions also forecast a good future of China’s economy. China’s economy monthly data analysis by Standard Chartered shows that seven economic foresight indicators were improved at different degree, indicating a quite low possibility of a sudden slowdown of China’s economy in upcoming months. Citibank forecasts China’s economy will slightly slow down but still keep a robust growth and the government will have no problem in achieving the growth objective.
Quite a few enterprises are also optimistic to the macroeconomic situation in future. The sales volume of SAIC Maxus under SAIC Motor Corporation Limited increased nearly 30% in the first half year on year. The robust growth of commercial vehicle in the first half is a good demonstration of the stability and positive development of macro-economy, said Lan Qingsong, vice president of SAIC Motor, “We have been confident in macroeconomic development and believed that the macro-economy will still keep a rapid growth.”
Source: Invest Guangzhou, July 31, 2017

 

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