An ethnic minority man poses for a selfie on Tiananmen Square outside the Great Hall of the People ahead of the opening session of the National People's Congress in Beijing, 5 March

Picture copyright

China’s economic system grew by 6.9% within the first quarter of 2017, in keeping with official figures.

The expansion fee, which compares enlargement with the identical three months within the earlier yr, was barely larger than many economists had forecast.

State-led infrastructure spending and demand for brand new property helped drive the world’s second largest economic system.

Final month China lower its development goal for this yr to six.5% from 6.7% in 2016.

China’s National Bureau of Statistics in an announcement stated “the nationwide economic system maintained the momentum of regular and sound growth from the second half of final yr, getting off to begin in 2017 and laying a stable basis for carrying out the whole-year development goal.”

One other set of knowledge additionally suggests a pick-up in home consumption. February retail gross sales jumped 10.9% from the earlier yr.

Picture copyright
Getty Photos

Whereas we should always all the time stay sceptical of the Chinese language authorities’s GDP knowledge, these figures recommend that development is stabilising.

However additionally they show that Beijing is counting on the identical outdated tips to drive its economic system.

Authorities spending on infrastructure, a booming property market and taking up debt had been all issues China’s management has pledged to maneuver away from within the transition in direction of a brand new, fashionable, open economic system.

All three are nonetheless evident on this knowledge, suggesting that the “outdated” mannequin of development – that depends a lot on the state – is alive and nicely.

Particularly, debt is a priority. China’s complete and personal debt is now price greater than 250% of GDP and appears set to develop. Analysts are divided about simply how outfitted China is to deal with that a lot debt, however no matter your view even the federal government has stated that accumulating this a lot debt is not ultimate and have to be addressed.

The query is simply how a lot political urge for food there might be to simply accept a less-than-glamorous development fee in a yr when President Xi Jinping has arguably his most necessary social gathering congress arising.

China is a key driver of the worldwide economic system and its efficiency is carefully watched by traders around the globe. Its 2016 development was its slowest in in 26 years.

Beijing’s intention to rebalance the economic system in direction of home consumption has led to main challenges for big manufacturing sectors, and there have been layoffs – particularly in closely staffed state-run sectors such because the metal business.