[Chinese
and foreign economists generally agree that the best hope for the country’s
long-term economic health is for the current emphasis on debt and investment to
give way to greater consumer spending. Adjusted for inflation, consumer
spending climbed 9.6 percent last year, led by blistering growth in online
retail sales of 26.2 percent. But as in other countries, including the United
States, much of that growth has come at the expense of brick-and-mortar stores
and malls.]
By Keith Bradsher
 |
|
Shoppers
in Sanya, China, in September. Adjusted for inflation, consumer spending
climbed 9.6 percent last year, led by blistering growth in online retail sales
of
26.2 percent. Credit Yuyang Liu for The New York Times
|
BEIJING
— 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.
Consumers
Keep Spending
Chinese and foreign economists generally
agree that the best hope for the country’s long-term economic health is for the
current emphasis on debt and investment to give way to greater consumer
spending. Adjusted for inflation, consumer spending climbed 9.6 percent last
year, led by blistering growth in online retail sales of 26.2 percent. But as
in other countries, including the United States, much of that growth has come at
the expense of brick-and-mortar stores and malls.
Real
Estate Prices Surge
When Zhou Xiaochuan, the governor of China’s
central bank, said at a news conference in Shanghai last February that the
answer to China’s immediate economic troubles lay in more mortgages, few paid
close attention. Chinese officials previously expressed concern that real
estate prices were already too high, hurting affordability and exposing the
economy to significant risks if prices tumbled.
But after Mr. Zhou’s remarks, state-owned
banks were instructed to step up mortgage lending, and the results were
spectacular. Sales of commercial buildings rose 34.8 percent, and residential
sales climbed 36 percent as prices leapt higher and higher. The steel, cement
and glass industries — all suffering from overcapacity in recent years —
benefited as they supplied builders, and electricity production to power those
factories rose. Municipal governments in Shanghai and elsewhere began imposing
administrative controls this winter to limit further real estate price increases.
Debt
Piles Up
More mortgages were part of a big expansion
in the overall credit moving through the Chinese economy. To achieve its 6.7
percent growth last year, the Chinese government allowed total credit to rise
at nearly two and half times that pace, according to a calculation by Louis
Kuijs, an economist at Oxford Economics. Credit used to grow at the same pace
as the economy, but debt has been accumulating faster than the economy’s output
since the global financial crisis.
The central bank, the People’s Bank of China,
said on Friday afternoon that it was providing liquidity assistance for 28 days
to several large commercial banks. It did not identify the banks. The central
bank also did not provide details except to say that it was using a market
mechanism to make sure the extra money entered the country’s financial system.
The People’s Bank of China did not respond to
requests for clarification. Stock markets were up on Friday in China, and
short-term interest rates were only slightly higher — two signs that while
money may be fairly tight in China ahead of the holidays, any difficulty has
not yet become severe enough to alarm investors.
What’s
in a Number?
Many concerns have been raised about the
quality of Chinese economic data. Western economists have suggested that
Chinese government statisticians underestimate growth in boom years and
overestimate growth during busts to present a smoother overall picture of the
Chinese economy. Worries about data quality increased after the state-run
People’s Daily quoted Chen Qiufa, the governor of the northeastern province of
Liaoning, as saying on Tuesday that local governments had inflated growth data
from 2011 to 2014.
But many economists say last year’s growth
appears to have been real — although bringing additional debt that could burden
the economy for years to come. Mr. Ning insisted on Friday morning that
national economic data was reliable, and he added that if local officials were
caught fabricating data, “we will show no leniency.”
Follow Keith Bradsher on Twitter at
@KeithBradsher
