China’s Gross Domestic Product grew at an annual rate of 6.7% in the first quarter of the year, says the government.
This is the lowest rate since 2009 for the second world power; but comfortably within the government’s targeted range.
In fact, whilst Beijing is supporting the industrial economy to maintain the decrease to an acceptable level, other sectors like the internet and technologies are growing.
All China’s bet consists to drive a gentle slowdown in the economy to rest the economic growth more on consumption and services, and less on the industry.
The industry and the financial sector have been standing idle in China since 2009, right from the start of the Subprimes’ crisis.
Besides, China’s economy needs to do with the sword of Damocles which represents its excessive debt. Only on the level of companies, the debt represents 160% of the GDP in 2016, versus 98% in 2008 according to Standards & Poors.
Finally, the deceleration is slower than anticipated by some economists. However, this support policy will have to continue if China’s government wants to reach its goal.
Valentin Demay, IEJ 1 Bis