Capital Group Financial Advisor Tokyo Japan- Where Is China’ s Economy Headed In 2017?
Capital Group Financial Advisor Tokyo Japan- Where Is China’ s Economy Headed In 2017?
Key Takeaways
China’ s economy can sustain its momentum through June, supported by government stimulus, infrastructure projects and housing development Demand for commodities and construction equipment should be supported by credit growth The Chinese renminbi will likely further depreciate against the U. S. dollar amid external pressures
The list of problems that China faces is not short. Its economy isn’ t growing as fast as it once was, monetary authorities are battling capital flight, debt is mounting and the new U. S. president is talking tough on trade. Here is how I see things shaping up for China in 2017.
Stimulus Effects Still Feeding Through the Economy
I am more optimistic than most about the direction of the Chinese economy. The consensus view is that China’ s economy will lose momentum in the first quarter of this year as the red-hot housing market cools and government stimulus wears off. There is also the risk of tense trade relations with the U. S.
That said, in my view China’ s economy can continue to grow along its current trajectory in the first half of the year, which is 6.5 % according to official government figures.
Here’ s why: There are enough new investment projects in the pipeline to support economic growth during the first half of 2017. Construction firms, for instance, reported order growth of greater than 30 % during the first nine months of 2016. This included a mix of big and small projects, ranging from real estate to infrastructure manufacturing.