By Zhu Zemin, Zhu Yi (Intern)
The National Bureau of Statistics (NBS) lately released the macroeconomic data in the first half year, which shows that main indicators are better than expected and the macro economy’s stability has been improved. Thereof, International Monetary Fund (IMF), Asian Development Bank (ADB), JP Morgan and other international organizations and institutions have up regulated China’s expected economic growth in 2017 and believed that China has made a steady progress in promoting its economic re-balance and has good support for its economic prospect.
According to the National Economic Data of the 1st half of 2017 released by the NBS on July 17, China’s GDP reaches RMB38,149 billion in the 1st half year, up by 6.9% if calculated in comparable prices.
Afterwards, the IMF immediately issued the updates of “World Economic Outlook”, increasing China’s expected economic growth in 2017 and 2018 by 0.1 and 0.2 percentage point respectively to 6.7% and 6.4%. It was the 3rd time that the IMF up regulates China’s expected economic growth in 2017.
Many other international institutions also adjusted their expectation on China’s economic growth. JP Morgan and Nomura adjusted China’s expected economic growth from 6.7% to 6.8%; the ADB changed China’s expected GDP in 2017 and 2018 from 6.5% and 6.2% respectively to 6.7% and 6.4%; Standard Chartered Bank up regulated China’s expected economic growth in 2017 from 6.6% to 6.8% and predicted that China is expected to realize the 1st accelerated growth since 2010.
In addition, Citibank adjusted China’s expected economic growth of the 3rd and 4th quarters from 6.5% and 6.4% to 6.7% and 6.6% respectively and the annual GDP growth from 6.6% to 6.8%; Bloomberg also believed, after its survey on 56 economists, that China’s expected economic growth in the 3rd and 4th quarters will be 6.7% and 6.6% respectively, up by 0.1% compared with the previous prediction.
The move of international organizations and institutions to up regulate the expected economic growth is the result of China’s unexpected economic performance in the 2nd quarter. ADB mentioned the unexpected economic performance in the 2nd quarter while explaining its move of up regulating the data in “Asian Economic Outlook”; Nomura said that the economic momentum of the 2nd quarter is better than expectation and the economic performance is relatively great in June.
Besides, international organizations and institutions have made in-depth analysis on Chinas economy and affirmed the good prospect of China’s economy in its steady progress. ADB states in its report that resident income has increased steadily and the public expenditure has kept expanding, which have contributed to the good prospect of China’s consumption, and that the prices of some commodities have rebounded slightly from the low level in 2016 and the overseas market demand has picked up, which have stimulated the import and export rebound in the 1st half year.
JP Morgan has made similar analysis: though the slow-down of investment in infrastructure and real estate and the impact of financial deleveraging might strike China’s economy in the latter half year, the steady expansion of consumption and service industry and the continuous increase of private investment has provided support for the positive outlook of China’s economy in 2017 on the whole.
International institutions generally believed that the steady expansion of consumption, import and export and service industry and the slight pick-up of private investment have offered good support for China’s economy and that the good performance of its macro economy and meso economy has contributed their up-regulate on China’s expected economic growth.
Several data show that China’s economy has run smoothly. The NBS data indicate that the contribution rate of consumption expenditures to economic growth is 63.4%, ranking the 1st among the “3 carriages”; according to the data of the General Administration of Customs, the import-export ratio has increased by 19.6% year-on-year in the 1st half of 2017, marking the highest 6-month growth since the latter half of 2011.
However, international institutions also believed there exist some uncertainty in China’s economy. For example, Nomura believed the slowed growth of real estate sales will bring downward pressure to China’s economy in the 2nd half of 2017 and the disturbance of geo-related factors, the fluctuation and mobility of RMBexchange rate and the drop of monetary indices from a high level will also bring downward pressure to the export.
“Australian Financial Review” said many observers might ignore the opportunities of Chinese economy if too much obsessed with risks. China’s GDP increased by 6.9% in the 2nd quarter, consumers have great confidence and the fixed-asset investment is strong. All these have shown the great momentum of Chinese economy. There are risks in China’s economy, but there are more opportunities.
Zhang Jianping, Director of the Regional Economic Cooperation Research Center of the Ministry of Commerce, said that the uncertainty of the external environment and the slow-down of investment will not exert too much influence on Chinese economy in the next half year as the remarkable import and export growth in the 1st half year has laid a good foundation for the economic growth, and there is no problem that China’s foreign trade realizes a positive growth 2017. It can be expected that the macro-economic growth prospect will be better than last year.
International institutions’ data analysis also implies a good prospect of Chinese economy. Standard Chartered’s Monthly Data Analysis of Chinese Economy shows that 7 prospective economic indicators have all been improved, which means that China’s economy is not likely to suddenly slow down in the coming several months. Citibank predicts that China’s economy might slow down slightly in the next half year but will still maintain robust growth and there is no doubt that the government economic growth objective will be achieved.
Many enterprises are also positive about the future macro economy. SAIC MAXUS’s sales of the 1st half year have been up by nearly 30% year-on-year. SAIC Deputy President Lan Qingsong said the great sales growth of commercial vehicles in the 1st half year is the great testimony of the good prospect of the macro economy. “We are confident in macro economic development and believe the rapid growth will be seen in the 2nd half year of 2017.”