BEIJING (Reuters) - A blizzard of data in coming weeks is expected to show China’s economy ended a strong 2017 on a slightly softer note, but activity has likely remained more resilient than expected despite a punishing crackdown on industrial pollution and a cooling property market.
A slight pullback in December industrial growth, producer inflation and investment would all reinforce consensus views that the world’s second-largest economy will cool gradually in 2018, while a more marked loss of momentum may put fears of a sharper slowdown back on the table and possibly stall the government’s push to reduce rising debt.
Reflecting expectations of a modest slowdown, economists see growth in industrial production easing only slightly to 6.0 percent, according to a Reuters poll, the slowest rate of expansion since early 2016 but still solid.
While Beijing’s war on winter smog in northern provinces has forced some steel mills and factories to curtail output, plants elsewhere in the country may have ramped up production to gain market share, supporting nation-wide activity and keeping China’s appetite for imported raw materials like iron ore relatively robust.
Sustained strength in global demand also is expected to continue to buoy China’s factories in the coming year, though double-digit export growth seen in late 2017 may not be sustainable for much longer.
Likewise, new lending by Chinese banks, while easing from November, likely continued at a solid pace, capping another record year for credit even as regulators look set to extend their crackdown on riskier forms of financing such as shadow banking.
Domestic consumption is also expected to remain in hearty shape, partly offsetting some of the drag from manufacturing. Retail sales are expected to grow by just over 10 percent. Both official and private surveys this week pointed to accelerating momentum in the services sector, which now accounts for over half of the economy.
The data will culminate in fourth-quarter and full-year GDP on Jan. 18.
The economy is expected to clock growth of 6.8 percent in 2017, up slightly from the previous year, before easing to around 6.4 percent this year.
Reuters reported on Thursday that China will keep its target for economic growth at “around 6.5 percent” in 2018 — the same as in 2017 — as it seeks to balance efforts to reduce risks in the financial system while keeping economic growth stable.
Reporting by Elias Glenn; polling by Shaloo Shrivastava; Editing by Kim Coghill