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china gdp

According to official data, China’s economy grew by 6.9% in 2017 – the first time in seven years the pace of growth has picked up.

The figure beats the government’s official annual expansion target of about 6.5%.

China is a key driver of the global economy and so the better-than-expected data is likely to cheer investors around the world.

However, many China watchers believe the GDP numbers are much weaker than the official figures suggest.

This month alone, the governments of Inner Mongolia and of the large industrial city of Tianjin have admitted their economic numbers for 2016 were overstated.

Taking the figures at face value, the 2017 growth rate is China’s highest in two years and it represents the first time the economy has expanded faster than the previous year since 2010.

However, as Beijing ramps up efforts to reduce risky debt and to increase air quality, analysts said this may impact 2018 growth.

The numbers released on January 18 also showed that in O4 of 2017, the economy grew at an annual rate of 6.8% – slightly higher than analysts had been expecting.

The country’s debt has risen significantly in recent years, with worrying numbers around local government loans, corporate and household debt and non-performing bank loans.

China becomes world’s largest economy

China Cuts 2017 Growth Target to 6.5%

The International Monetary Fund (IMF) said recently that China’s debt had ballooned and was now equivalent to 234% of the total output. It said China needed to concentrate less on growth and instead help improve banks’ finances, among other efforts.

Meanwhile, the Chinese government says it has been taking steps to contain risky debt despite the impact that might have on economic growth – efforts the IMF said it recognized.

The government has promised to continue tackling local government debt, among other efforts, and on January 18 vowed to help state-owned enterprises “leverage and cut debt … and to repay their bonds on time this year”.

China’s strict anti-pollution measures, which were introduced across 28 cities in 2017, are also expected to hurt economic growth in the short term.

The measures have included shutting down or cutting back production at factories in heavy industry like cement and steel.

Households have also been asked to switch to natural gas and electricity from coal, in an effort to curb pollution.

However, this policy left millions without proper heating, and so was temporarily abandoned in December.

According to officials, Beijing’s air quality improved sharply in the winter of 2017. They also heralded their efforts as a “new reality” for China.

China has cut its 2017 growth target to around 6.5%, down from 7% in 2016, PM Li Keqiang has announced.

Li Keqiang was addressing China’s rubber-stamp parliament, the National People’s Congress (NPC), which has gathered in Beijing for its annual session.

The Chinese economy expanded at its slowest pace in 26 years in 2016.

Li Keqiang said he would tackle state “zombie enterprises” producing more coal and steel than the market needed.

Similar pledges in the past have proved hard to fulfill.

More than 3,000 legislators are meeting in the Great Hall of the People.

The NPC and its advisory body hold ceremonial meetings every year known as “lianghui” or “two sessions”.

Image source Flickr

PM Li Keqiang described the world’s second-largest economy as a butterfly struggling to emerge from a chrysalis.

The premier said this transformation was filled with promise but also great pain.

Li Keqiang repeatedly paid tribute to Communist Party leader Xi Jinping and said that under the sound leadership of the Party, the Chinese people had the courage and ingenuity to overcome all difficulties.

His list of China’s difficulties ranged from the smog which blankets much of the country to the laziness of some government officials.

In a veiled reference to President Donald Trump’s complaints about China’s exchange rate and trade policies, PM Li Keqiang warned of a far more complicated global picture in the year ahead with China facing the threat of growing protectionism.

NPC leaders are tolerating slightly slower economic growth this year to give them more room to push through some painful reforms to deal with a rapid build-up in debt, Reuters reports.

On the subject of tackling China’s pollution issues, Li Keqiang pledged to “work harder” to address the issue exacerbated by heavy industry.

This year’s “lianghui” comes ahead of a major Chinese Communist Party congress, due to be held later this year.

That congress will confirm party chief and President Xi Jinping’s second term in office, as well as announce changes in the party’s top leadership.