News / Business

"China's economic growth to slow to 6.5% next year"

Monday, 19 December 2016 1:59 PM [ Last Update: Monday, 19 December 2016 3:02 PM ]

A new study says China is set to face economic challenges next year including low growth.

A new study says China's economic growth will slow to 6.5 percent in 2017 and its currency will continue falling against the dollar.

The study conducted by a top Chinese think-tank warned that the economy of China would also face increasing downward pressure next year.

Chinese Academy of Social Sciences (CASS) predicted that yuan currently hovering around eight-year lows would lose another three to five- percent against the dollar.

The report was released three days after Chinese leaders wrapped up a key economic meeting known as the Central Economics Work Conference. During the conference attended by President Xi Jinping, the leaders vowed to fix the problems ailing the economy, taking aim at sclerotic state-owned enterprises and property speculation that has raised fears of a massive bubble about to burst.

According to CASS, the economy expanded 6.7 percent for three consecutive quarters in 2016, the slowest pace since the global financial crisis unfolded eight years ago.

Last year, CASS predicted that China’s economy would grow at a rate of 6.7 percent.

Now, the prediction of 6.5 percent plumbs the lower depths of the national goal of between 6.5-7.0 percent. It would be the lowest annual figure since 1990 when it clocked in at 3.9 percent.

The think-tank cited several factors which have helped China's economy stay on target including “stabilization of consumer spending growth, a pick-up in real estate investment growth, and robust infrastructure spending.”

Meanwhile, imports and exports are forecast to decline by 9.5 and 7.2 percent respectively in the current year compared to 2015.

China is now facing a number of challenges, ranging from underperforming and overproducing steelmakers to massive capital outflows as investors seek better and more stable investments abroad.

Observers say with the election of Donald Trump as the next US president, China will face an uncertain economic environment because Trump has threatened to slap the country with massive tariffs.

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