Continued Growth of Chinese Economy Future Reforms to be Watched (Business Brief No.3708 Full Ed.)

China's latest economic indicators have suggested satisfactory growth during 3Q17, notably with 6.8-percent growth YoY in GDP, though this has slowed minimally from the 1H17 pace of 6.9-percent growth YoY. Industrial production also rose 6.6 percent YoY, beating the 6.0-percent increase in August, while September retail growth was recorded at 10.3 percent YoY, versus the 10.1-percent YoY growth in August, depicting stronger demand.

With respect to trade, indicators were also in positive territory, including growth of 8.1 percent YoY in exports and 18.7 percent YoY in imports, resulting in a trade surplus of USD28.47 billion. Outward and inward trade data were both stronger than in August being 5.5 percent and 13.3 percent, respectively. Such healthy trade performance reflects a global economic recovery, plus high demand for electronics along with better commodity prices, for example iron ore.

A slight slowdown may occur in 4Q17, due to a high 4Q16 base that could negatively affect GDP growth overall, plus some SME weaknesses exhibited in the Caixin Indices. However, China's growth momentum has strengthened over the past nine months, as shown in the current average growth rate of 6.9 percent YoY, so its government will likely ensure that this pace will be maintained in 4Q17. Thus, KResearch estimates that China's overall 2017 growth will be at least 6.7 percent YoY.

New KR Logo_แนวนอนNew KR Logo_แนวนอนNew KR Logo_แนวนอนChina's economic restructuring policy is expected to be implemented gradually, with their complex bureaucratic system being a significant obstacle to state enterprise reforms. But as seen from the 19th Communist Party Congress now in session, President Xi Jinping's political position is being consolidated, which should facilitate further reforms, and may make Chinese economic performance more interesting over the remainder of 2017.