China’s government has announced its new economic growth target for 2017. At “around” 6.5% it’s just a bit lower than the 2016 target of 6.5% to 7%. China’s GDP grew by 6.7% in 2016. The slight decline in the headline growth target is echoed throughout the government’s planning.
With China’s once every five years Communist Party leadership shift coming up this year, official figures released last night showed China’s GDP growing at a 6.8% rate in the fourth quarter. That puts the full-year 2016 growth rate at 6.7%. That’s right in the middle of the official current target range of 6.5% to 7% growth and matches the old 6.7% target exactly
Chinese President Xi Jinping has told the country’s Central Economic Work Conference that an economic growth rate of less than the official 6.5% annual target would be reasonable if it helped China avoid asset bubbles and slowed the growth of debt. The 6.5% annual growth target through 2020 was set in the last five-year plan
Last night the Chinese government reported a wok full of economic data. GDP climbed 6.7% in the third quarter of 2016 from the third quarter of 2015. That matches the 6.7% year over year growth reported for the second quarter. And it just happens to lie smack dab in the middle of the government’s goal of 6.5% to 7% growth for 2016
Today’s warning from the Bank for International Settlements was the most dire yet. What’s called the credit-t0-GDP gap climbed to 30.1%. This measure, which compares the current credit-to-GDP ratio and its long term trend is now the highest for China in the data series that stretches back to 1995. The Bank for International Settlements says that any gap above 10% signals elevated strains in a country’s banking system
The big question is why the Shanghai stock market is hanging so tough on continued negative news on growth in China’s economy
So much for the March pick up in China’s economy. In April, data released this weekend say, China slipped back into the trend of slower growth. Working from that data Bloomberg calculates that China’s GDP grew by 6.88% year over year in April, down from a 7.11% growth in March
Today, May 10, evidence of “firming” inflation in China led to a rally in industrial metals such as copper and other commodities; which is a complete turnaround from the weekend when a larger than expected decline in Chinese exports and imports led to Monday weakness in commodity prices.
