Beijing – China’s economy grew by 6.7 per cent in 2016, compared with 6.9 per cent a year earlier, marking its slowest growth in more than a quarter of a century.
China’s growth is a key driver of the global economy and a major concern for investors around the world.
The figure is in line with Beijing’s official growth target of between 6.5 per cent and 7 per cent.
But some observers say China’s growth is actually much weaker than official data suggests.
For the fourth quarter, the world’s second biggest economy grew by 6.8 per cent.
China is the world’s second-biggest importer of both goods and commercial services, meaning its economic performance has a big knock-on impact around the world.
It plays an important role as a buyer of oil and other commodities. Its slowdown has been a factor in the decline in the prices of such goods.
Beijing’s aim to rebalance the economy towards domestic consumption has led to major challenges for large manufacturing sectors with layoffs, especially in heavily staffed state-run sectors such as the steel industry.
Many economists think that GDP is a massively flawed form of measuring the health of any economy but in China it is even worse.
There is significant proportion of China watchers who don’t believe the GDP figures are real at all.
For example, in 2016, the country’s (year-on-year) GDP was exactly 6.7 per cent for three quarters in a row.
While this seems numerically unlikely, I suppose it is possible that this could happen.
Without solid, reliable figures this remains a debate with wide-ranging, conflicting views.
Mind you, even if at worse China’s real GDP is around 4 per cent at present, there are plenty of national governments which wouldn’t mind a taste of those numbers.
Although China’s economy picked up slightly in the last three months of 2016, the rebound was not expected to continue according to the Economist Intelligence Unit (EIU) which is predicting growth of 6.2 per cent this year.
“A slowdown in the property market and steps to address supply shortages in the commodity sector ought to drag again on demand and output,” said the EIU’s Tom Rafferty.
He also pointed to potential damage to US-China trade ties under a Donald Trump presidency.