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China economy grows 6.7% in 2016

China’s economy grew by 6.7% in 2016, compared with 6.9% a year earlier, marking its slowest growth in more than a quarter of a century.

China’s growth is a key driver of the global economy and a major concern for investors around the world.

The figure is in line with Beijing’s official growth target of between 6.5% and 7%.

But some observers say China’s growth is actually much weaker than official data suggests.

For the fourth quarter, the world’s second biggest economy grew by 6.8%.

China is the world’s second-biggest importer of both goods and commercial services, meaning its economic performance has a big knock-on impact around the world.

It plays an important role as a buyer of oil and other commodities. Its slowdown has been a factor in the decline in the prices of such goods.

Beijing’s aim to rebalance the economy towards domestic consumption has led to major challenges for large manufacturing sectors with layoffs, especially in heavily staffed state-run sectors such as the steel industry.

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Can we trust the numbers? By Stephen McDonell, BBC Beijing Correspondent

Plenty of economists think that GDP is a massively flawed form of measuring the health of any economy but in this country it is even worse.

There is significant proportion of China watchers who don’t believe the GDP figures are real at all.

For example, in 2016, the country’s (year on year) GDP was exactly 6.7% for three quarters in a row.

While this seems numerically unlikely, I suppose it is possible that this could happen.

Without solid, reliable figures this remains a debate with wide-ranging, conflicting views.

Mind you, even if at worse China’s real GDP is around 4% at present, there are plenty of national governments which wouldn’t mind a taste of those numbers.

Read more from Stephen here.

This picture taken on July 11, 2016 shows a man cycling past a billboard showing an aerial view of ShanghaiImage copyrightAFP

Trump effect?

Although China’s economy picked up slightly in the last three months of 2016, the rebound was not expected to continue according to the Economist Intelligence Unit (EIU) which is predicting growth of 6.2% this year.

“A slowdown in the property market and steps to address supply shortages in the commodity sector ought to drag again on demand and output,” said the EIU’s Tom Rafferty.

He also pointed to potential damage to US-China trade ties under a Donald Trump presidency.

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Meanwhile Tim Condon from ING in Singapore said relations with a Trump administration were “the biggest known unknown”.

“Trump advisers and cabinet-nominees have identified the US-China relationship as in need of adjustment to support the president-elect’s objective a manufacturing renaissance.”

The trade of goods and services between US and China amounted to an estimated $659bn (£534bn) in 2015. The United States has a trade deficit with China, totalling $336bn in 2015.


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