'Resilient' growth tops forecasts

China's economy got off to a strong start in the first quarter, with GDP expanding at a higher-than-expected 6.9 percent year-on-year.

The result, analysts say, has laid a solid foundation for the country to achieve its growth target of at least 6.5 percent this year.

GDP growth in the first three months, marking the quickest pace since the last quarter of 2015, was 0.1 percentage point higher than the 6.8 percent in the fourth quarter of last year, the National Bureau of Statistics said on April 17.

Full-year GDP growth for 2016 was 6.7 percent.

Industrial production growth jumped to a higher-than-expected 7.6 percent year-on-year for the quarter, from 6.3 percent in the first two months, the highest level in 27 months.

"The growth beat general expectations; it seems no one had anticipated such strong growth," says Zhu Baoliang, an economist at the State Information Center.

Fixed-asset investment growth, likewise, rose to 9.2 percent for the quarter from 8.9 percent. The growth was largely underpinned by property growth, which was 9.1 percent for the quarter, compared with 8.9 percent in the first two months, and rising manufacturing investment.

"The trend of higher real estate investment will continue in the second quarter to bolster China's growth," says Liu Dongliang, an analyst at China Merchants Securities. Experts say government tightening measures in the sector will show up by the third quarter.

Private fixed-asset investment rose by 7.7 percent year-on-year in the quarter, compared with 6.7 percent in the first two months.

"This is the most eye-catching of the macroeconomic data," says Xu Hongcai, an economist at the China Center for International Economic Exchanges. "It shows that China's policies encouraging private investment, intensifying reform and protecting private property rights have worked."

Retail sales growth beat expectations, rising to 10 percent year-on-year in the first quarter, down by 0.4 percentage points compared with 2016 as a whole. Retail sales growth in March, however, rose to 10.9 percent, up from 9.5 percent in the first two months.

"Generally speaking, the national economy has continued with stable and sound momentum in the first quarter, as growth rebounded moderately and economic adjustment was steadily promoted," NBS spokesman Mao Shengyong said on April 17.

"China's economy has continued its trend of stable and improving growth," says Xu, citing improvements in a spate of indicators, such as employment, corporate profits, power consumption and logistics.

"There's no doubt that China will achieve the (GDP) target," says Xu of the figure of at least 6.5 percent this year.

"Given the stable growth, China can put greater emphasis on supply-side structural reform and prevention of financial risks."

Data released on April 17 point to "resilient growth momentum", said Nomura Securities in a research note. "We are raising our 2017 GDP growth forecast by 0.2 percentage points to 6.7 percent." The results also mean support for the world economy.

The International Monetary Fund has raised its growth forecast for the Chinese economy and global economy for the next two years.

In its latest World Economic Outlook, the IMF predicted that the Chinese economy will grow at 6.6 percent in 2017 and 6.2 percent in 2018, up by 0.1 percentage points and 0.2 percentage points, respectively, from its last such report in January.

xinzhiming@chinadaily.com.cn

(China Daily European Weekly 04/21/2017 page13)