Great news for the Chinese economy. China has started in 2017 with its strongest quarterly performance in 18 months. The gross domestic product grew at an annual rate of 6.9% in the first quarter of 2017, which was just slightly higher than analysts’ consensus expectations.
Wang Xinling, lead analyst at the think tank China Policy said,
“This level of growth cannot be sustained. The first quarter’s results were boosted by bank lending, and a peak in starts of long-term construction projects. After this, the indicators will start to weaken.”
Fixed-asset investment in the first quarter expanded 9.2% over the year before, which beat the forecasts that analysts had made of an 8.8% growth.
As Eswar Prasad, a China finance expert at Cornell University said,
“The apparent strength of Chinese GDP growth belies rising macroeconomic tensions and financial system stresses, exemplified by high and rising levels of corporate leverage as well as a frothy housing market.”