China Heads for First Full-Year GDP Acceleration Since 2010
(Bloomberg) -- China’s economy is poised for its first full-year acceleration since 2010, the year its gross domestic product surpassed Japan’s to become the world’s second-largest.
Data due Thursday at 3 p.m. in Beijing will show the economy expanded by 6.8 percent in 2017 from a year earlier, according to Bloomberg’s survey. Other estimates show:
- Fourth-quarter growth ticked down to 6.7 percent year-on-year from 6.8 percent in the prior three months
- Retail sales increased 10.2 percent in December from a year earlier, the same pace as the prior month
- Industrial production rose 6.1 percent, also unchanged from November
- Fixed-asset investment climbed 7.1 percent for the year, the slowest pace since 1999
Economists, whose growth estimates weren’t optimistic enough before three of the last four quarterly releases, may have yet another surprise in store, according to hints from one high-level source. Premier Li Keqiang said earlier this month that the 2017 expansion was about 6.9 percent, citing better-than-expected exports, fiscal revenue, household income and corporate profits.
Read More: What to Focus on When China Reports GDP
"The Chinese economy seems to have ended 2017 on a stronger footing than we initially expected," Yao Wei, chief China economist at Societe Generale SA in Paris, wrote in a note this month. "This momentum, especially the part fueled by external demand, may carry on well into the new year."
In housing, data released Thursday show prices rose in the most cities in six months even as the government prolonged its campaign to curb speculation. New-home prices, excluding government-subsidized housing, in December rose in 57 of 70 cities tracked by the government, compared with 50 in November, the National Bureau of Statistics said.
The median full-year economic growth estimate in Bloomberg’s survey ticked up steadily last year, rising by 0.1 percentage point in each of the final three quarters from 6.5 percent in the first. Quarterly growth is projected to decelerate slightly, though two of 49 economists project acceleration from the third-quarter pace.
What Our Economists Say..."A small upside surprise is a distinct possibility, and would show strong momentum into 2018," Tom Orlik, chief Asia economist at Bloomberg Economics in Beijing, wrote in a note, referring to the quarterly reading. "Relative to expectations of a more marked slowdown over the course of 2017, China outperformed."
Projections for this year’s expansion have been rising too, and are now at 6.4 percent. However expectations for less-rapid growth in the future are clear: Economists see 6.2 percent growth in 2019.
Still, years after China surpassed Japan as the second-largest economy, it’s getting closer to knocking the U.S. from its perch at the top and is also playing a crucial role as a driver of global expansion. The International Monetary Fund says China contributes more than a third of world growth on a purchasing power parity basis.
As Beijing prepares for three years of "critical battles" against debt, smog and poverty, the rest of the world may be poised to benefit from greater stability in the biggest trading nation as it balances those objectives with ample expansion. Global growth will accelerate to 3.7 percent this year for the best performance since 2011, according to Bloomberg surveys.
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