Little Surprise, While Underlying Problems Remain

Economic Research	19 October 2016
China
Economic Highlights
Little Surprise, While Underlying Problems Remain China’s economic growth stabilised at 6.7% YoY for the third straight quarter in 3Q16, given supports from strong property sales and government’s pro-growth policies. But the private sector remained weak, due to sluggish recovery of demand and funding difficulties. Looking ahead, we still see mounting pressure in a longer term, given moderating property market, weak private investment, ongoing supplyside reform, rising corporate debt and external uncertainties in the coming quarters. As such, GDP growth could move towards 6.4% YoY in 2017. Policy wise, targeted fiscal stimulus will remain as a major tool to cushion economic moderation. More stimulus spending will come from enlarged fiscal deficit, policy banks and PPP projects. The central bank will stay with a prudent stance, amid stabilising economic numbers and tasks to curb asset bubbles. Economist:  Zhang Fan| +8621 6288 9611 ext 105
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