Chinese economists see GDP growth of 6.8% for the second quarter of 2017 in the week prior to the release of official data.
A survey of economists by 21st Century Business Herald found a consensus forecast of roughly 6.8% growth in the Chinese economy for the second quarter of the current year, with steady consumption and exports compensating for a modest decline in investment.
Tsinghua University’s Center for China in the World Economy expects the strong investment and weak consumption of the first quarter to shift to stable investment and strong consumption in the second quarter, with Chinese economic data posting “improvements overall” despite “areas of concern.”
“With respect to the three main drivers, consumption basically held steady, investment declined slightly, while exports are okay,” said Zhao Yu, chief economist of Orient Securities to 21st Century. “Overall there could be a slightly dip compared to the first quarter.”
Data from China’s General Administration of Customs indicates that foreign trade has improved since the start of the year following negative growth in exports for 2016. China’s export volume increased 8.2% during the January – May period to hit USD$853.35 billion.
When it comes to consumption figures from the National Bureau of Statistics point to growth of 10.7% in retail sales for two consecutive months since the start of the second quarter. The bumper growth follows a slide in growth to 10% during the first quarter.
Fixed asset investment grew 9.2% in the first quarter – it’s highest level since June last year,on the back of infrastructure and real-estate investment. The YoY growth figure for the January to May period eased back to 8.6%, however, following two consecutive months of slackened expansion.
Lu Zhengwei, chief economist of Industrial Bank, said that credit expansion had declined after hitting a peak in the fourth quarter of 2017, and that this process could continue to hold back investment growth going ahead.
“This perhaps answers the question of why economic easing is currently quite slow…the delayed effects of monetary policy, with the present determined by the past.”
Infrastructure investment growth is expected to continue easing after hitting a breakneck 21.26% rate of growth at the start of the year, before declining to 16.66% by May.
Heightened scrutiny of local government financing by Beijing, with the issuance of directives 50 and 87 in rapid succession just recently, is also seen putting further pressure on regional infrastructure investment.
“Last year local bond swap scale swap scale was quite large, and local financing platforms still have none at hand, but the further we progress the greater the pressure is likely to be,” said Lu Zhengwei.
Founder Securities chief economist Ren Zeping foresees increased stability and reduced volatility in the economy in future as China transitions towards a more consumption and service-oriented economy, pointing to a rise in the tertiary sector’s share of GDP to 51.6% in 2016.