Full-scale trade war between China, U.S. 'unlikely'
As the world economy is plagued by widespread uncertainties, China's economy continues to face downward pressure and its GDP growth is likely to reach 6.4 percent in 2017, an economist at UBS said Thursday. That forecast is below the target range of 6.5 percent to 6.7 percent set by the Chinese government for the five-year period through 2020.
Stable consumption, an expanding services sector, supportive fiscal policy and the tightening of property market will contribute to the country's economic growth in the coming year, Wang Tao, a UBS China economist, told a conference call.
Several economic indicators in the first 11 months of 2016 support the view that the country will be able to meet this year's GDP growth target of 6.7 percent, experts said.
The manufacturing Purchasing Managers' Index was 51.7 in November, compared with October's 51.2 and above the 50-point line for the fourth straight month, the National Bureau of Statistics (NBS) said on Thursday.
Zhao Qinghe, a NBS senior statistician, attributed the growth to rising domestic demand, expanding manufacturing of consumer goods and high-tech industries and improving trade figures.
The uptick further provides evidence of a strengthening domestic economy and the country's GDP growth will range from 6.5 percent to 6.7 percent in 2017, Tian Yun, director of the China Society of Macroeconomics Research Center, told the Global Times on Wednesday.
In recent days, a new round of home-buying restrictions has been announced, aiming to let some air out of a real estate bubble, experts noted.
"Housing sales in 2017 will largely drop but the number of newly built property projects will not decline that significantly," Wang forecast.
Experts said that the cooling of the domestic real estate market will to some extent fuel next year economic growth as some capital released from the property market will flow into other sectors like infrastructure.
Also, China's economy will be affected by the new U.S. administration under Donald Trump, with the U.S. Federal Reserve Board set to tighten monetary policy. Expectations of such a move have caused a surge in the U.S. dollar in recent days, pushing the yuan lower, according to experts.
Although the yuan fell steeply against the dollar recently, it remains quite stable against a basket of currencies, Xu Gao, chief economist at China Everbright Securities Co, told the Global Times.
The Fed is set to raise interest rates later this month and possibly raise rates twice in 2017, Wang forecast.
"This in turn raises the pressure of capital flight and yuan depreciation," she said, noting that the government is stepping up efforts to tighten the management of the cross-border flow of capital.
It is less likely that the U.S. will impose comprehensive tariffs on Chinese imports after Trump takes office and a full-scale trade war between China and the U.S. is unlikely to happen, Wang said.
