China's economy registers 6.7% growth in 2016

20 January 2017

China's economy grew at its slowest rate, 6.7 per cent in over a quarter-century and with president-elect Donald J Trump to be sworn in today, a trade stand-off, between Beijing and Washington cannot be ruled out.

China's leaders used huge monetary stimulus in 2016 to steer the country's economy to not only hit annual target but to also record the first quarterly pick-up in two years.

The Asian superpower had been the pivot of global growth but Beijing had been trying to cut its heavy reliance on exports and state-backed investment and instead focus on domestic consumer spending to drive expansion.

However, the transition had thrown up many challenges with the manufacturing sector struggling in the face of sagging global demand for its products and excess industrial capacity left over from an infrastructure boom.

Consequently, the economy grew 6.7 per cent last year, in line with forecasts but down from 6.9 per cent in 2015. It was also the worst reading since 1990.

The October-December increase of 6.8 per cent also came as the first quarterly improvement since the final three months of 2014.

According to the national statistics bureau, the figure was a ''good start'' for the government's goal of achieving 6.5 per cent annual growth through to 2020.

China, the world's second-biggest importer of both goods and commercial services, played an important role as a buyer of oil and other commodities and the slowdown there had been a factor in the decline in the prices of such goods.

Beijing's aim to rebalance the economy towards domestic consumption had led to major challenges for large manufacturing sectors with layoffs, especially in heavily staffed state-run sectors such as the steel industry.

However, there are many China watchers who do not believe the GDP figures, however even if China's real GDP was around 4 per cent at present, there were many national governments who would want to benefit from those figures.

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