GDP growth of China indicates it a stable economy
The latest GDP data from China show the world’s second-largest economy seemingly in good health. Third-quarter growth was 6.7 per cent, reflecting the government’s continued pump priming by way of increased spending, and a robust property market.
Shift in China’s strategy
Earlier this decade the Chinese government began a ‘rebalancing’ of the economy by shifting the focus away from a production and export-led model to an increasingly domestic consumption and services reliant one; it has had some success in this with consumption contributing 71 per cent of GDP growth in the first three quarters of 2016.
Still, the high level of government spending and the mounting debt — core debt as a percentage of GDP exceeded 250 per cent in the first quarter according to data compiled by the Bank for International Settlements — are causes for concern.