So it's been awhile since I've talked about the Chinese economy and I thought I'd give you a quick update. It's a tad unfortunate, but China has always seemed to be a gauge for the overall growth level of the developing world. While that may have been the case in the 1990s, it's just no longer a growth powerhouse today. China is not to be viewed as the image of growth, but rather how a developed nation emerged at probably the fastest pace in history.
The next time you hear someone say "I'm going to invest in China for all the growth opportunities," ask them what year they were born. There's just not the same level of economic prowess anymore, and try as they may to keep their GDP growth rates artificially inflated, China has really just entered the realm of developed-nation status. The Chinese National Bureau of Statistics is very good at presenting the country's economic state in the best light possible.
But I just don't know how you make the lowest growth rate in 26 years look good...
The Chinese economy expanded 6.7% in 2016, which is clearly lower than a 6.9% growth in 2015. It was the weakest full-year expansion since 1990 but within the government's target range of 6.5%-7%, as investment and consumption growth has softened.
In 2016, services sector/tertiary industry rose 7.8%; slowing big time from the 8.3% in 2015 and accounting for 51.6% of the total gross domestic product, up 1.4 percentage points. Manufacturing and construction/secondary industry grew by 6.1%, compared to a 6% in the prior year.
Final consumption expenditure accounted for 64.6% of GDP, lower than 66.4% in the preceding year. Meanwhile, capital formation contributed 42.2% while net exports were a 6.8% drag on growth.
For 2017, China is facing more headwinds from external environment, including from a new US president who clearly dislikes them and has been threatening tough trade measures against Beijing. However, the International Monetary Fund recently upgraded its growth forecast for the country’s economy for the year to 6.5%, 0.3% points higher than their October forecast, on the back of expectations for continued government stimulus. We will have to see what the year brings, but trade issues with the US may all of a sudden become a far bigger problem than originally anticipated. Check out more details at Trading Economics.
Below is a chart of China's GDP performance since the country began keeping track in the late 1980s:
Greetings, GradMoney Readers!
October 22, 2018
Which City Has the Richest Population?
September 12, 2018
CSRIC Fun Facts: Trees & Pollution
October 24, 2018
Search By Tags
I'm busy working on my blog posts. Watch this space!