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March 15, 2017

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Home » Business » Economy

Nation’s economy strong and stable

CHINA’S economy has been showing more solid stabilization and stronger momentum in the first two months with faster growth in investment and industrial production, the National Bureau of Statistics said yesterday.

The nation’s fixed-asset investment grew 8.9 percent year on year to over 4 trillion yuan (US$580 billion) in the first two months of the year, up from 8.1 percent in 2016.

The expansion was driven by investment in infrastructure construction which jumped 27.3 percent year on year in the first two months, almost double the pace in the same period last year.

Private investment, which accounts for more than 60 percent of the total fixed-asset investment, grew 6.7 percent in January and February, accelerating from the annual increase of 3.2 percent in 2016 and marking the fastest growth since March 2016.

“The strong investment data, together with rapid credit expansion in the first two months of 2017, confirms our view that the risks to China’s growth momentum in the first half are tilted to the upside,” the Australia and New Zealand Banking Group said in a note yesterday.

The bank said China’s first-half GDP may reach 6.6 to 6.7 percent supported by investment in infrastructure and real estate.

The bureau’s data also showed that growth in value-added industrial output, a measure of activity in designated enterprises with an annual turnover of at least 20 million yuan, accelerated to 6.3 percent year on year in the first two months, compared with a 5.6 percent increase for the same period in 2016.

The services output index rose 8.2 percent in the first two months, 0.1 percentage points faster than in the same period last year.

The services industry contributed 51.6 percent of China’s GDP in 2016.

Retail sales, meanwhile, grew more slowly at 9.5 percent year on year, down from 10.4 percent for the same period last year.

Bureau spokesman Sheng Laiyun said the overall positive economic indicators for January and February showed the foundation of China’s economic stabilization was more solid, and the outlook better.

He said government efforts to attract more private capital into traditionally state-dominated areas had taken effect, lifting the number of public-private partnership projects and raising the amount of fixed-asset investment.

He attributed slower retail sales to a cut in tax incentives for buying small cars.

Figures released earlier this month showed that consumer inflation averaged 1.7 percent in the first two months, compared with last year’s annual inflation of 2 percent.

Foreign trade increased 20.6 percent year on year, compared with a 12.6 percent decrease in the same period last year.

Expansion in manufacturing activities accelerated in February, with the official PMI rising 0.3 points month on month to 51.6 and the Caixin PMI up 0.7 points to 51.7.


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