Friday, January 20, 2017

China: growth is slowing again in 2016 – The Parisian

LChina has seen its economic growth slow again in 2016, with its weakest performance in 26 years, according to the official figures published Friday, a sign of an economy still very fragile for the asian giant.
The gross domestic product (GDP) of the world’s second largest economy has swelled by 6.7% last year, the lowest since 1990, announced by the national Bureau of statistics (cbs).
This figure corresponds to the median forecast of 23 experts polled by the AFP, and remains in line with the expectations of the regime, which was an annual performance of between 6.5% and 7%. China’s growth stumbled to 6.9% in 2015.
The official statistics, in spite of a reliability highly controversial, is c arefully considered: the country still accounts for 30% of global growth and remains the leading commercial power in the world.
After a growth of 6.7% on each of the first three quarters of 2016, China has recorded a slight acceleration on the last three months of the year, with a growth of 6.8% of GDP.
But the pillars of the chinese economy remain fragile: a cavalcade of the credit fueled by rates accommodative, government spending increased strongly in infrastructure, and especially a boom in the real estate market in unison to a surge in prices in large cities.
“overall, the economy continues to evolve in an appropriate range, it gains in quality and efficiency”, however, has welcomed the SNB in a press release.
In fact, Beijing boasts gladly in its efforts of rebalancing: it intends to boost domestic consumption, the new technologies and services, and restructure State-owned enterprises, at the expense of traditional industries.
The industrial pro duction continued to slow in December, with an increase of 6% year on year, compared to 6.2% in November. This is below the 6.1% expected by analysts surveyed by Bloomberg.
conversely, the retail sales, a barometer of household consumption, have swollen in the last month of 10.9% year on year, more than the 10.8% in November and the anticipation of the market (or 10.7%).
“Nevertheless, we must be aware that the internal situation and external remains complicated and that it still remains to strengthen the foundations of our economy,” said the SNB.
The chinese exports –engine crucial to the growth– break down: they have been plunged by 7.7% in 2016.
And the economic transition is painful: the chinese industry is suffering from excess capacity and to be haunted by state-owned companies “zombies” over-indebted, while the outflow of capital is intensifying.
trying to avoid a hard landing and stimulate activity, the authorities have significantly inflated their expenditure in infrastructure: investment in fixed capital rose 8.1% in 2016, boosted by the efforts of government fiscal stimulus.


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