Chinese economy expected to meet its official growth target in 2017

October 21, 2017 10:47 amComments Off on Chinese economy expected to meet its official growth target in 2017Views: 95

Chinese economy industryChinese economy expected to meet its official growth target in 2017, according to the state planning agency, despite the country’s fight against pollution, which is expected to shrink production in the winter months. China has forced 28 cities in smog-filled northern regions to reduce harmful emissions in the air, known as PM2.5, by at least 15% from October to March, which is expected to drop some steel production by up to 50%.

But representatives of the National Development and Reform Commission (NDRC) say the world’s second-largest economy will keep its pace of economy growth.

“We expect to achieve the annual growth target of 6.5%”, said the head of National Development and Reform Commission, during a briefing on the sidelines of the Chinese Communist Party Congress.

Most economists believe that China’s real growth can easily surpass the goal. The economy grew by 6.8% in the third quarter of the year and by 6.9% in the first half of the year. The extrapolated data expects to surpass the government target of 6.5%, which follows the growth slowdown from last years 6.7%, which was the weakest in last 26 years.

The Chinese economy surprised the global markets and investors with strong growth this year, which is triggered by the recovery of smog-producing industries, such as steel production, as well as by higher demand from Europe and the US.

But in a recent comment economists at Societe Generale have indicated that shrinking production in the winter may reduce industrial production growth by 0.6 to 0.8 percentage points and gross domestic product growth by 0.2-0.25 percentage points over the next six months. The industrial production slowed down to 6.3% in the third quarter, down from 6.6% in the previous quarter, according to data from last week, and the services sector is the biggest contributor to this decline.

The prices of raw materials, such as steel, copper and iron ore have become particularly volatile in China and world markets in recent weeks because of fears of potential shortages in winter. China’s steel exports shrank by 3.7% in September from a record peak in the previous month, as production was reduced in line with Beijing’s campaign. Analysts are predicting further declines over the winter.

The government is pushing for a restructuring program that aims to “improve” the economy, reduce pollution and cope with the contraction of profit-making opportunities in sectors such as steel and coal.

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