ON TARGET AGAIN

China’s official 2016 GDP number is in, and the government promises it’s “authentic”

Obsession
China's Transition
Obsession
China's Transition

China’s economy expanded 6.8% in the fourth quarter of 2016, the latest official data (link in Chinese) show. For the full year, China’s GDP grew 6.7%, the slowest in 26 years—but within the government’s target range of 6.5% to 7%.

In each of the first three quarters of 2016, China posted a consistent 6.7% increase in GDP, raising doubts about the veracity of the figures. Earlier this week, local authorities in China’s northeastern Liaoning province admitted to inflating its GDP figures from 2011 to 2014, as officials sought to advance their careers.

Ning Jizhe, head of the National Bureau of Statistics, said during a briefing (link in Chinese) in Beijing today (Jan. 20) that the national-level statistics are “authentic” and “reliable,” but that the bureau would crack down on data fraud, which sometimes happens on local levels.

Analysts had forecast 6.7% growth for the fourth quarter.

Strong fiscal support, loose monetary policy, and a booming property market in the first three quarters of last year were the main factors that drove China’s economic growth in 2016, analysts say. Chinese banks extended a record $1.8 trillion of loans in the past year, as the government used more credit-fueled stimulus to meet its growth target, even at the risk of exacerbating debt levels in the economy.

The International Monetary Fund earlier lifted its forecast for China’s GDP growth in 2017 to 6.5%, citing continued policy stimulus. But capital outflows, debt, and geopolitical uncertainties will be the major risks for China’s growth this year, the IMF noted.

The national statistics agency also released a slew of other economic data on the same day. Among them, China’s fixed-asset investment, a key gauge of construction activity, went up 8.1% in 2016 from the year before, the slowest full-year expansion since 1999.

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