China will have no problem meeting its economic growth target of around 6.5 per cent this year and may even beat it. Steps that have been taken to rein in the overheated property market have been effective and will remain in place.
The world’s second largest economy expanded by a stronger-than-expected 6.9 per cent in the first half, fuelled by heavy infrastructure spending and a property boom. If growth does beat last year’s 6.7 per cent - the lowest in 26 years - it would mark the first acceleration in the growth rate in seven years.
As fears of the economy tanking have faded, policymakers have become readier to tackle mounting debt and push forward difficult structural reforms. While the economy could lose some momentum in coming months due to higher borrowing costs and property cooling measures, the slowdown may be moderate.
Survey-based unemployment in major cities was 4.83 per cent in September, the lowest since 2012. China’s booming economy continues to propel Asia and drive worldwide economic growth. But the uptick in growth is expected to result in greater debt levels over the long term, raising the prospect of a sharp growth slowdown in China.
Since the global financial crisis in 2008 its debt load as a percentage of gross domestic product has grown more than ten per cent per year on average.