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CMC Gao Hua Reports A 6.8% Expansion That Has Surpassed Forecasts As China Consumption Lifts

2017-02-07 21:54 2352

HONG KONG, Feb. 7, 2017 /PRNewswire/ -- As China prepares to introduce reforms aimed at an economic transition, and with a possible butting of heads coming up over trade deals with newly inaugurated U.S. President Donald J Trump, the world's second-largest economy expanded 6.8 percent in 2016, a welcome figure for the communist government.

The encouraging growth figure comes due to better-than-forecast consumption reports as the country's growing middle class loosened their purse strings. Stellar production statistics and subdued deflation also contributed to a powerful start to the year which allowed the nation's central bank to concentrate on lowering debt levels that caused a worrying property bubble towards June and July, and is still a cause for concern.

Analysts forecast a 10.6 percent increase in retail sales in December, whereas the actual figure was very close to 11 percent. For the year, fixed-asset investment rose 8.2 percent while industrial output fell short of projections at 6.1 percent, according to a report by Mr Alexander Harrison, a senior vice president at CMC Gao Hua.

CMC Gao Hua Head of Retail Trading, Mr Aaron Stevens, commented on the figures yesterday, "I think over the next few years the government will look increasingly to the service sectors and consumption to drive expansion, especially as we see their mainstay growth drivers like exports weaken significantly as they look to transform into a first-world economy."

The news of continued stable growth partially independent from manufacturing and exports is particularly welcome.

According to government data, around two-thirds of 2016's expansion was due to consumption, and the service sector made up over 50 percent of the total figure. But the division between rich and poor is still a major concern for the country's economists as certain regions and sectors pull ahead of the rest.

Both the International Monetary Fund and business news outlet Bloomberg have projected Chinese growth to drop down to around 6.3 percent this year, with analysts stressing the importance of stabilizing the weakening yuan and encouraging more outbound investment by large Chinese conglomerates.

"You have to take the good with the bad," said Mr William Evans, Head of Mergers & Acquisitions at CMC Gao Hua. "We are all delighted that the improved housing market contributed to the stabilization of the Chinese economy, but at what cost? It could be that fears of an asset bubble and the friction between China and America's new president could weaken confidence again."

Contact:

CMC Gao Hua | +1-647-946-4220info@cmcalliance.com | http://www.cmcalliance.com

Source: CMC GAO HUA
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