China's economy grows 6.9% in first quarter of 2017: gov't

China to post solid, steady first-quarter growth on building boom, but debt risks loom

China's economy grows 6.9 per cent in first quarter of 2017: govt

Many economists have anxious that China's growth had to lag as global economic growth has been very modest since the Great Recession. "The strong growth and better external demand has provided room for a faster pace of countercyclical monetary policy tightening". The world's second largest economy is expanding at a pace that is broadly consistent with the government's official target. The annual increase slowed to 11.3 percent, down from 11.8 percent in February.

They said the government's announcement last month that it would build a vast new economic zone in the relatively unprosperous area of Xiong'an shows authorities have a "tendency to rely on infrastructure development to sustain growth".

NBS spokesperson Mao Shengyong said the economy had achieved a rosy start for this year, attributing the strong performance mainly to robust factory activity, strong consumption and rebounding exports.

China is a key driver of the global economy and its performance is closely watched by investors around the world.

Growth last was that strong in the July-to-September quarter of 2015.

Fixed asset investment rose 9.2 percent on-year, trouncing estimates, but IHS believes the growth was due entirely to faster spending in industry and construction.

Experts said because of the lag effect, the latest round of curbs will take effect in the following months. Prices peaked previous year at 700 yuan amid the government restrictions. China's long-ailing industrial sector has been posting its best profits in years, thanks to higher prices for steel and other building materials, giving "smokestack" industries more cash flow to pay off debt and invest in more efficient plants.

However, the NBS said in a note accompanying the data that Beijing's daily new home transaction volumes fell in March after the tougher property curbs were introduced but did not provide a number. The latest Chinese PMI surveys for manufacturing stand at three-year highs, as electricity consumption grew by 8% in the first quarter and rail freight volumes by 13%. Prices of new homes increased in 68 cities in March from a year earlier, compared with 67 in February.

Auto sales also showed signs of recovering after weakening early in the year after the government reduced subsidies.

In March, the business activity index for services was 54.2 percent, 1.0 percentage point higher than that of February, 1.1 percentage points higher than that of the same month a year ago, continuing the expansion trend.

Private investment growth accelerated to 7.7 percent.

At the same time, China's central bank has shifted to a tightening bias, and is using more targeted measures to contain risks in the financial system, after years of ultra-loose settings.

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