Growth shows China's economy has resilience

SHI YU/CHINA DAILY

　　Still driving global growth

　　China's GDP achieved a 6.9 percent growth year-on-year based on comparable prices in the first quarter of this year. From the perspective of the world economic pattern, this is an economic performance beyond extensive market expectations and its biggest effect will be to further consolidate China's status as the world's economic stabilizer and engine. Many market analysts previously anticipated that China would maintain such a status for the foreseeable future, but the first-quarter performance will further enhance their confidence in the Chinese economy.

　　For China's trading partners and the world economy, promoting the interaction between China's economic growth and its wider opening-up, and between China's economic growth and its expanding imports offer a good opportunity for them to take a free ride on the fast-driving Chinese train.

　　In the first quarter of this year, China's imports grew by 31.1 percent year-on-year, 16.3 percentage points higher than its growth in exports, which was 14.8 percent. Despite its continuous domestic crude oil consumption growth, China's crude oil output has been on a downward trajectory since last year, with the output declining by 6.8 percent year-on-year in the first quarter, 5.0 percentage points higher than last year's decline. This is enough to demonstrate that at a time of bearish international oil prices, China has not chosen to protect domestic oil manufacturers, but instead chosen to substitute expanded imports for domestic manufacturing, a move that has brought it under increased pressure from industrial transformation and labor transfer. Such a choice shows that China is a responsible trading power.

　　Mei Xinyu, a research fellow with Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce

　　Economy has strong momentum

　　With its booming real estate market, China's economy grew by 6.9 percent year-on-year in the first quarter, a slight increase from 6.8 percent in the fourth quarter of last year. Multiple economic indexes show that China's economy has strong momentum. Based on its comprehensive analyses of various factors, Deutsche Bank has raised its previous 2017 forecast of China's GDP growth from 6.5 percent to 6.7 percent and also raised its 2018 expectation to 6.3 percent. Deutsche Bank also expects that, due to its slowed credit growth, China's GDP growth may moderately slow in the following three quarters to 6.8 percent, 6.6 percent and 6.5 percent respectively.

　　Considering that currently China does not face the urgent demand to launch a new round of fiscal stimulus packages, Deutsche Bank believes that the country is unlikely to raise its benchmark interest rates this year, but the possibility for interest rate rises will rise in 2018.

　　Zhiwei Zhang, an economist with Deutsche Bank

　　Reaction to China GDP data

　　Optimism over the underlying growth momentum of the Chinese economy in 2017 has continued to improve, following official figures showing that GDP output grew by 6.9 percent over the first quarter of 2017. This represents stronger growth than was expected and does point towards the Chinese economy making a turnaround after consecutive years of declining growth. What has been impressive about the rebound has been the ongoing signs of domestic economic strength, and by this I mean consistency in domestic consumption with retail sales and a recent trade balance release being just a few pieces of economic data that has surprised to the upside.

　　Jameel Ahmad, VP of Corporate Development and Market Research at FXTM