Years of double-digit growth are giving way to more moderate gains for the Chinese economy.
Growth, at 6.8 percent in the second quarter, is expected to top the 6.3 percent average rate of the last decade, and could even run slightly above the government’s official growth target of around 6.5 percent.
Rising trade tariffs, falling corporate profits and a real estate market slowdown have all become factors in the mixed picture for China, the world’s second-largest economy, alongside persistent concerns about the country’s massive $8.3 trillion government debt.
But the apparent slowing in China this year has surprised many analysts, who expected the country to experience only a so-so year in 2020, similar to past years.
“We expect GDP growth to be lower next year, but it will still be above 6 percent,” said Jack Liu, who researches and analyses Asia at Oxford Economics, which predicts growth at 6.5 percent to 6.6 percent this year and 6.7 percent to 6.9 percent in 2020.
Showing strong signs of resilience, China’s government has pledged to spend billions more on infrastructure to try to maintain growth. And analysts agree the government is pushing through a patchwork of policies to keep growth going.
“From government spending and central bank policies, we see macroeconomic policy to be very supportive of growth,” Mr. Liu said.
China’s economy has certainly changed from those of years past.
China’s economic growth rate was on the upward path right after the 2008 financial crisis as the country’s government brokeneck pursuit of growth took a break, according to data released by the country’s statistics agency. The country’s overall economy has been on an upward trend ever since.
China’s economy got an important boost in 2015 as the Chinese government spent heavily to spur growth in the first half of that year and to import cheap commodities to help slow the price of commodities. China’s imports in the second half of that year hit a record high, nearly doubling the second half of 2015’s total.
Imports soared, and economists have pointed to the surge as one of the reasons behind the higher growth in the second half of 2016.
But a contraction in December likely dampened 2016 growth, and the country’s growth rate is projected to continue to edge lower for the next few years.
China’s state-run news agency, Xinhua, noted in an overview of the economic data that China’s growth did not hit 7 percent in three consecutive years.
“It is worthwhile to remember that our economy has reached a stage of considerable development,” China News Service said in a commentary, calling China’s growth “solid” and “steady.”
“With our domestic consumption growing and major regions supporting economic development,” the news service added, “overall, China’s economy will be in the next growth phase.”