At the beginning of the year, a number of forecasters predicted that China's economy will remain stable in 2018 with economic growth at around 6.7 percent. China's economic growth will stabilize.
The Institute of Industrial Economics of Chinese Academy of Social Sciences recently released the result on a research on Chinese economists’ hotspots for the fourth quarter of 2017. The research shows that economists expect growth stabilizing. They predict that the economic growth for the full year of 2017 is 6.8 percent. In 2018, the Chinese economy will continue to maintain this growth rate. Meanwhile, the growth of the US and India will speed up, while the EU's economic growth will slow down.
According to the 2018 China Economic Blue Book recently released by the Chinese Academy of Social Sciences, it expects that China’s economic growth for the full year of 2017 will come at around 6.8 percent, an increase of 0.1 percentage point over the previous year. It expects the economic growth at 6.7 percent in 2018. Also the Institute for Advanced Research of SUFE also predicts China's real GDP growth will be about 6.7 percent for 2018.
However, a recent report released by the Institute of International Finance at Bank of China pointed out that in 2018 China's economy will grow by about 6.7 percent. While stabilizing growth, the country will pay more attention to improving quality and efficiency. The National Academy of Development and Strategy of Renmin University of China also predicts that China's macro economy will maintain relatively steady in 2018 with a real GDP growth rate of 6.7 percent.
The Institute of Industrial Economics of the Chinese Academy of Social Sciences finds in the survey that economists are more confident about future growth of foreign trade now than before. 45 percent of the surveyed economists believe that export in Q4, 2017 will rise year on year, 18 percent of them expect a year-on-year decrease, and 27 percent of them expect no changes. 64 percent of the economists hold that prices will climb from a year earlier in Q4, 2017. They predict that new driving force of prices is on the way.
According to introduction, global economy experienced stable recovery in 2017. Especially, economic recovery in developed countries and regions like the USA, Europe and Japan beat expectation. For China, external demand largely increased. Under new normal of economy, China quickens its steps in adjusting economic structure. New momentum of economic growth keeps gathering, fiscal revenue is better than expected, fiscal policies are more active, industrial production grows quickly, and industrial enterprises’ initiative in replenishing stocking plays a part.
But on the supply side, China’s labor supply decreases year by year since 2012. The growth of China’s total factor productivity maintains low in recent years, and the growth of stock capital also declines along with the decrease of the growth of fixed asset investment.
Zhu Baoliang, chief economist at the State Information Center, believes that though results have been produced in the supply-side structural reform, excessive capacity in traditional industries have not been fundamentally removed yet. In addition, long-term mechanism and countermeasures must be proposed to tackle housing problems. Another problem is local government debts. Hidden debts and contingent liabilities of local governments expand quickly. In the meantime, the problem that some local governments finance from state-owned financing platforms is quite severe.
Experts say that Chinese economy has transited from high-speed growth to high-quality development. China is now experiencing the difficult period of changing development model, improving economic structure and changing growth impetus. But it must be seen that structural contradiction of the economy remains unsolved. There is still a long way to go for structural adjustment and reform. There is still a lot to do for the prevention of financial risks and deleveraging. The stable performance with good momentum for growth registered in China is, to some extent, driven by improving external demand in the context of global economic recovery and the replenishment of domestic stock. But, private investment is still not vigorous. Bottleneck in some laggard fields are not tackled yet, and overall leverage level is still high.
Translated by Coral Zhong, Jennifer Lu
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