Jan 20, 2017

China's Economy Grows Strongly, Yet Central Bank Eases Policy

China's economy firmly hit its growth target last year and even accelerated a bit at the end. In most countries, that would be seen as unequivocally good news.

But this is China, where figures are sometimes doubted and where economists look for signs of strain underneath the numbers. Indeed, Chinese officials who released the economic data on Friday faced questions about the country's mounting debt. And in an unusual move, its central bank on Friday took an extra step to inject more money into the economy over the next month. China's economy grew 6.7 percent last year after accelerating slightly to 6.8 percent in the fourth quarter, the government's statistics bureau announced on Friday morning.

The strong economic growth in 2016 came after a weak start last year, when China's currency and stock market were tumbling and many foreign investors fretted that the country's three decades of robust economic expansion might be ending. The Chinese government appears to have delayed an economic reckoning, but at a high cost. The central bank and state-owned banks shoveled trillions of renminbi into a surge of credit, putting aside longstanding worries about a deeply indebted corporate sector and signs of a real estate bubble. The government borrowed and spent heavily, continuing oversize projects like the construction of world-class highways and high-speed rail lines to cities that are increasingly remote from the main hubs of economic activity near the coast.

But Ning Jizhe, the commissioner of the National Bureau of Statistics, dismissed concerns about rising debt.

"I don't think this worry is necessary," he said at a news conference.

Hours after the data release, the central bank said on its official Weibo microblog account that it was providing temporary help to "several large commercial banks" that have been distributing large sums of cash ahead of China's Lunar New Year celebrations, which begin at the end of next week.


The New Your Times
By KEITH BRADSHER