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 .