China 2016 GDP Growth Weakest in 26 Years


The Chinese economy expanded 6.7 percent in 2016, lower than a 6.9 percent growth in 2015. It was the weakest full-year expansion since 1990 but within the government's target range of 6.5 to 7 percent, as investment and consumption growth has softened.

In 2016, services sector/tertiary industry rose 7.8 percent; easing from 8.3 percent in 2015 and accounting for 51.6 percent of GDP, up 1.4 percentage points. Manufacturing and construction/secondary industry grew by 6.1 percent, compared to a 6 percent a year earlier.

Final consumption expenditure accounted for 64.6 percent of GDP, lower than 66.4 percent in the preceding year. Meanwhile, capital formation contributed 42.2 percent while net exports were a 6.8 percent drag on growth.

Investment in fixed assets (excluding rural households) grew by 8.1 percent, the least since 1999, following a 10 percent last year. Investment by the state holding enterprises increased by 18.7 percent (vs 10.9 percent in 2015) while those of private investment went up by 3.2 percent (vs 10.1 percent in 2015).

Total retail sales of consumer goods rose 10.4 percent, slower than 10.7 percent in 2015. Sales in urban areas grew by 10.4 percent and those in rural by 10.9 percent. Online retail sales rose 26.2 percent versus 33.3 percent the prior year. Retail sales of physical goods increased of 25.6 percent from 31.6 percent in 2015, accounting for 12.6 percent of the total sales of consumer goods.

Total value of imports and exports in yuan terms decreased by 0.9 percent comapred to 7.0 percent decline in a year earlier, with exports dropping 2.0 percent while imports going up by 0.6 percent. 

In the December quarter, the economy expanded 6.8 percent, compared to a 6.7 percent growth in the previous three quarters while markets expected a 6.7 percent expansion. It was the strongest growth since the fourth quarter 2015, supported by strong consumer spending, higher government  expenditure and robust bank lending. 

On a quarterly basis, the GDP advanced 1.7 percent, compared to a 1.8 percent growth in the previous three months. It was the weakest expansion since the March quarter 2016.

For 2017, China is facing more headwinds from external environment, including from a new US president, who 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 percent, 0.3 percentage points higher than their October forecast, on the back of expectations for continued government stimulus.

China 2016 GDP Growth Weakest in 26 Years


National Bureau of Statistics | Rida Husna | rida@tradingeconomics.com
1/20/2017 4:12:58 PM