GROWTH in China’s real estate and financial sector slowed in the fourth quarter of 2016, despite an uptick in the overall service sector that contributed to better-than-expected GDP growth in the quarter, National Bureau of Statistics (NBS) data showed Saturday.
China reported Friday that its economy expanded by 6.8 percent in the fourth quarter thanks to strong consumer spending and record bank lending to stimulate the economy, despite rising debt concerns.
China’s service sector contributed 58.2 percent to the country’s economic growth in 2016, marking a rise of 5.3 percent from a year ago, the NBS said in a notice posted on its website Sunday. The service sector accounted for 51.6 percent of China’s total gross domestic product (GDP) in 2016.
A detailed breakdown in economic growth by industry issued by the NBS showed growth in China’s red-hot property market slow to 7.7 percent in the fourth quarter from 8.8 percent in the third quarter, adding to concerns that a cooling housing market would drag on economic growth.
It also highlighted a sharp slowdown in the financial sector, which decelerated from 5.8 percent growth in the July-September period to 3.8 percent in the fourth quarter.
Growth in the construction sector also slowed marginally in the fourth quarter to 5.9 percent from 6.0 percent in the third quarter, despite a rebound in market confidence with new housing starts unexpectedly rising 12.5 percent in December compared to a month ago.
Despite signs of cooling in these sectors, state-owned newspaper Economic Daily warned Sunday that some Chinese firms with large sum of capital have shown “the dangerous tendency of overly favoring virtual industries than the real economy,” looking to the property market and financial markets for quicker profits.
The overall service sector remained strong in the quarter, growing 8.3 percent compared to 7.6 percent in the third quarter.
“Other services” overtook the real estate sector to become the fastest growing segment of the economy, with growth of 10.6 percent in the fourth quarter, up from 8.8 percent in the third.
Other services include many consumer services such as media and education, but also scientific research, social services and utilities.
Growth in transportation, storage and postal services accelerated to 9.9 percent in the fourth quarter, compared to a 6.5 percent rise in the third quarter, Saturday’s data showed.
The retail and wholesale sector also improved marginally to 7.2 percent for October-December from 7.0 percent in the third quarter as China’s consumers kept spending.