China’s economic growth results are expected to remain stable not only in 2017 economic reports yet to be released but also in 2018, despite a slight decline in a major index measuring the expansion of the manufacturing sector in December, analysts said.
While there is some variation in the forecast, analysts said the country’s GDP growth may register up to 6.9 percent for 2017.
The official manufacturing purchasing managers index, released on Dec 31, dropped to 51.6 in December, compared with 51.8 in November, according to the National Bureau of Statistics.
Still, the index remained comfortably above the 50-point mark that separates growth from contraction, with numbers above 50 indicating expansion.
“The manufacturing sector is stable and improving, a trend that has become more entrenched,” Zhao Qinghe, a senior NBS statistician, said in a statement.
The annual average reading of the index for 2017 was 51.6, which is 1.3 points higher than in 2016.
“The December reading dropped a little bit, but it still reached the annual average level, indicating that expansion of the manufacturing sector remains strong,” Zhao said.
As seen in PMI changes in 2017, the trend of an improving economy has become more obvious, said Chen Zhongtao, an analyst at China Logistics Information Center.
“The PMI has remained above 51 and even exceeded 52 in September. The overall trend is stable, with only small monthly fluctuations,” he said.
Based on the average monthly reading of PMI, Chen said China’s GDP growth could reach about 6.9 percent in 2017.
Growth in the fourth quarter could reach 6.7 percent and the whole-year growth could be 6.8 percent, said Li Chao, an analyst at Huatai Securities.
China achieved GDP growth of 6.9 percent for the first three-quarters. Analysts generally predicted that growth could dip in the fourth quarter as the effect of environmental protection measures and slowing property sales growth unfolded.
Growth in China’s services industry picked up in December, an official survey showed on Dec 31, as the sector continued to show solid expansion.
NBS also said that China’s official nonmanufacturing PMI rose to 55 in December, up from 54.8 in November.
The services sector accounts for over half of China’s economic growth, and analysts said the strong nonmanufacturing sector expansion, together with the manufacturing expansion, will contribute to the stable GDP growth this year.
The nonmanufacturing index reading has remained above 54 in 2017 except in August.
Qu Qing, an analyst at Hua Chuang Securities, said the construction sector has helped bolster the index, indicating that infrastructure investment remains stable, which will help boost overall economic growth in 2018.
Despite its stable economic growth trend, China also faces some challenges, such as an increase in raw materials prices and rising corporate costs, said Chen of China Logistics Information Center.