OECD sees China growth slowing to 6.5 per cent in 2017, 6.3 per cent in 2018

OECD sees China growth slowing to 6.5 per cent in 2017, 6.3 per cent in 2018

International News

China’s economic growth is likely to slow to 6.5 percent this year and cool further to 6.3 percent in 2018, the OECD said, though exports are set to pick up as global demand strengthens. The Organisation for Economic Co-operation and Development also warned of China’s ballooning corporate debt in its bi-annual economic outlook report released on Tuesday.
“In terms of risk, we believe that internally the biggest risk is the accumulated and fast pace of growth of credit both in terms of shadow banking and the banking system,” Alvaro Santos Pereira, director of the country studies branch of the OECD’s Economics Department, told reporters. “I think it’s important to intensify efforts to tackle this issue.” China’s corporate debt is about 175 per cent of GDP, one of the highest in emerging market economies, he said, with state-owned enterprises (SOEs) accounting for around 75 per cent of that. The OECD’s forecast for 2017 is in line with the Chinese government’s growth target of around 6.5 per cent this year, versus last year’s 6.5-7 per cent range. The economy grew 6.7 percent in 2016, the slowest pace in 26 years. Economic growth remains high “but is gradually and appropriately moderating as the population ages and the economy re-balances from investment to consumption,” the report said.