Asia Regional Integration Center

GDP growth accelerated slightly from 6.7% in 2016 to 6.9% in 2017, reversing the declining trend since 2011, when the impact of stimulus initiated by the government in late 2008 faded out. On the supply side, services remained the main driver of growth, on the back of rapid expansion in transportation, information transmission and technology, and leasing and business services. On the demand side, consumption remained the main growth driver, but consumer confidence has started to wane in 2018 as the economy lost momentum in the second quarter.

After an uptick in 2017, GDP growth is expected to return to its moderating trajectory. Strong momentum from 6.8% growth in the last quarter of 2017 spilt over into 2018, as the economy remained strong in the first quarter. Though there has been a moderation in the second quarter, the growth forecast for 2018 is still seen to reach 6.6%, above the official target of 6.5%. Growth is forecast to slow further to 6.3% in 2019, in light of the deceleration of demand growth, the imposition of US tariffs, and the implementation of PRC’s countermeasures.