-
Advertorial
-
FOCUS
-
Guide
-
Lifestyle
-
Tech and Vogue
-
TechandScience
-
CHTF Special
-
Nanhan
-
Futian Today
-
Hit Bravo
-
Special Report
-
Junior Journalist Program
-
World Economy
-
Opinion
-
Diversions
-
Hotels
-
Movies
-
People
-
Person of the week
-
Weekend
-
Photo Highlights
-
Currency Focus
-
Kaleidoscope
-
Tech and Science
-
News Picks
-
Yes Teens
-
Fun
-
Budding Writers
-
Campus
-
Glamour
-
News
-
Digital Paper
-
Food drink
-
Majors_Forum
-
Speak Shenzhen
-
Business_Markets
-
Shopping
-
Travel
-
Restaurants
-
Hotels
-
Investment
-
Yearend Review
-
In depth
-
Leisure Highlights
-
Sports
-
World
-
QINGDAO TODAY
-
Entertainment
-
Business
-
Markets
-
Culture
-
China
-
Shenzhen
-
Important news
在线翻译:
szdaily -> Business
Financial risk control outweighs growth
    2017-May-18  08:53    Shenzhen Daily

THE economic growth of China is set for its weakest patch since the global financial crisis as authorities pull back on the stimulus that helped the economy get off to an unexpectedly strong start this year, and keep funds tight to deter risky lending.

After clocking 6.9 percent in the first quarter thanks to spending on infrastructure and a property boom that policymakers want to rein in, analysts surveyed by Reuters reckon economic growth will just about make government target of 2017 of 6.5 percent as it slows over the rest of the year.

Massive debt — standing at nearly 300 percent of GDP — and serious budgetary imbalances mean the government can’t carry on pump priming. The brakes went on in April, when annual growth in fiscal spending dropped to 3.8 percent from 21 percent the first quarter.

And worries about speculative bubbles have forced the central bank to tighten short-term liquidity, while trying to keep medium-term funding available for investment.

“Noticing how serious policymakers seem to be at the moment about reining in financial risks, it’s not impossible we’re going to see a significantly lower economic growth target next year,” said Louis Kuijs, an economist at Oxford Economics in Hong Kong.

Scope for further tightening in monetary policy could be limited if economic growth became uncomfortably slow.

“I don’t think we’re going to see much more additional tightening … but the risks now are on the downside,” said Julian Evans-Pritchard, an economist at Capital Economics in Singapore.

Policymakers want to move the economy onto a path where consumer spending becomes the main driver, but it’s not there yet.

“Consumption has been very steady and that has been a huge benefit — it has been a very nice buffer,” said Kuijs.

“But in my view, unlike in the United States where consumption by itself can drive the cycle, I would argue that in China, that is not yet really possible ... because consumption is still following on to what is happening in investment and wages.”

Household spending only accounted for 37.1 percent of China’s economy in 2015, according to World Bank data. While that is up from a low of 35.8 percent in 2007, it is far below the 54.2 percent average for middle income countries.

And spending is looking soft, at least by Chinese standards.

Automobile sales rose 4.6 percent in the first four months of 2017, about three-quarters the pace of a year ago. Movie ticket sales, flagged as a sign of China’s growing consumer class, stalled last year and have been mixed this year.

Annual retail sales growth eased to 10.7 percent in April, and has been on gradual downtrend since 2010, when it notched over 18 percent. Consumption, on a per capita basis, is growing slower than GDP.

April data released Monday for factory output and fixed asset investment also showed growth slowed from March.

(SD-Agencies)

深圳报业集团版权所有, 未经授权禁止复制; Copyright 2010, All Rights Reserved.
Shenzhen Daily E-mail:szdaily@szszd.com.cn