By CGTN’s Martina Fuchs
A new report from the Asian Development Bank (ADB) sends a bullish signal for the whole region, while suggesting structural reforms need to continue for China.
The Asian Development Outlook 2017 report shows continued moderate growth in China, as the government implements measures to transit the economy to a more consumption-driven model.
Overall output is expected to slow to 6.5 percent in 2017 and 6.2 percent in 2018, down from 6.7 percent last year, while inflation is forecasted to pick up to 2.4 percent this year.
A property agency in Anxin County near Xiongan New Area in Hebei Province is suspended from doing business, as regulators prevent speculation for the newly launched economic zone neighboring Beijing. /CFP Photo
“Investment growth will be a little bit weaker, mainly because of the slowdown in the real estate sector, and exports will be less of a drag than last year. So overall it’s a very benign growth forecast,” said Jurgen Conrad, head of the economics unit of the ADB.
Gross domestic product officially grew by 6.7 percent in 2016, the slowest rate over the last 26 years.
The structural shift of economic activity from industry to services shows re-balancing is progressing as planned, the ADB says, as growth now relies more on internal demand rather than exports.
A shut-down ironworks being torn down in Hangzhou, Zhejiang Province in east China, as part of the de-capacity efforts across China. It caused job severe loss, but the ADB report says China’s labor market managed to maintain stable. /CFP Photo
China is aiming to expand its economy by around 6.5 percent in 2017, and to implement a proactive fiscal policy and maintain a prudent monetary policy.
“The growth momentum is still very strong, so what’s most important now is to control financial risks, and to make investment more productive,” Conrad said.
Meanwhile, the ADB warns of possible further currency depreciation of the Chinese yuan and more financial risks ahead, such as capital outflows and bubbles in the housing market.
