Several international institutions, including IMF, World Bank, and UN, issued positive projections on the Chinese economy, overwhelming voices predicting a “hard landing”, People’s Daily said on Feb 13.
IMF projected China’s economy will grow by 6.5 percent in 2017, 0.3 percentage points more than the October forecast, according to the World Economic Outlook Update issued on Jan 16.
“China remains a major driver of world economic developments. Our China growth upgrade for 2017 is a key factor underpinning the coming year’s expected faster global recovery,” said Maurice Obstfeld, chief economist at IMF.
Reports from World Bank and the United Nations recently also projected a 6.5-percent growth in China’s economy in 2017 and said it will stabilize in the next two or three years.
International institutions’ projections are based on the stabilizing economic data from 2016, which was driven by supply-side reform, economic restructuring and emerging industries, said Niu Li, a researcher from the State Information Center.
In 2016, China’s GDP grew by 6.7 percent year-on-year, surpassing 70 trillion yuan ($10.17 trillion). Fixed-asset investment surpassed 59 trillion yuan, rising 8.1 percent from a year earlier, and investment in the service sector has become the main driver of growth. Total retail sales of consumer goods reached 33 trillion yuan, 10.4 percent higher than the year before.
A significant reason for the more optimistic projection about China’s economy, according to IMF, is the “continued policy stimulus”.
Niu said policies will focus on supply-side and administrative reform to solve medium- and long-term problems, and measures to prevent systematic risks. In 2017, supply-side reform will be expanded from steel and coal to other industries.
With China becoming the second-largest economy and major contributor to global growth, every one percent upward in China’s economy will make tremendous contributions to the world, he said.