The economy in China returned with vengeance during the first three months of 2017, recording its first acceleration back to back in the past seven years and the global outlook for growth just when signs of reduced spending by consumers surfaced across the U.S.
The economy in China grew by a better than had been expected 6.9% thanks to strength in infrastructure investment, housing, retail sales and exports. It appears to have done that without worsening its credit risks, which is a welcomed development for worldwide economists worried about the huge debt burden of the nation.
The second largest economy in the world represented about a third of the global growth in 2016 and given its strong data from the first quarter, is set to contribute that amount or more in 2017, said a chief economist based in Singapore.
The strong economic showing is a good start to what should be an eventful 2017 politically for Premier Li Keqiang and President Xi Jinping whose government set a target for growth of 6.5% or higher. Chinese policymakers are intent on steady growth as a way to ensure a smooth reshuffle of leadership expected in the latter part of the year.
The economy in China is amidst a huge structural shift from its reliance in the past on export and manufacturing led growth to consumer demand and services.
Officials also are attempting to avert a trade conflict with the United States, manage the outflows of capital amidst pressures of depreciations on its yuan and slow growth down in corporate, household and government debt.
Imports to China that came from the Association of Southeast Nations were up 22.6% during March from the same month one year ago, while those that came from Singapore increased a whopping 41.5% and Australian imports were up an amazing 75%.
Expansion during the first quarter came as the country’s real estate market did not let policy constraints bother it, exports surged while a rebound in retail sales was experienced.
In March, economic growth from the same period one year ago surged to over 7.6% which was up from February’s 7%.
Financial risks had been contained as growth rose at its fastest pace in 5 years which equaled 11.8% at current price terms, which makes the problem of excess leverage appear to be somewhat more manageable said on economist based in Beijing.
Total credit moved up to 258% of the economic output in 2016, which was up from 2005’s 158%.