Chinese economy reported weakest growth in 26 years

Chinese economy grew by 6.8% in Q4 2016, according to the report of the Beijing-based Institute of Statistics. For the entire 2016 the growth is 6.7%. Although the economy recorded the slowest growth since 1990, the economists estimated current data, as a sign of stabilization in the second largest economy in the world

However, the experts warn again that the current economic model is not sustainable. The Chinese growth is still highly dependent on stimulus measures of the government, says the report of the International Monetary Fund (IMF). The economy is threatened by strong cooling, if the loans continue to grow rapidly, and the government does not take decisive measures against the high debts of enterprises, according to the IMF.

There is pressure over the economy and problems both outside and inside. The weak foreign trade, high duties and the risk of trade disputes with the US, as well as the protectionism of the new US president Donald Trump, are among the most serious risks to the world’s second largest economy this year. According to the economists and analysts the door of US market will not remain open after Trump becomes president of the United States.

After the minimal growth in November, the Chinese exports again reported a sharp drop in December. For the full year, the exports calculated in dollars, declined by 7.7% on an annual basis, while the imports decreased by 5.5% yoy.

Beijing is about to change the economic model of the country. Instead of cheap producer for the rest of the world, the country wants to encourage local companies to become more innovative and strengthen domestic demand.

more recommended stories