China's Q4 GDP beats expectations on fiscal expansion
|China's YoY GDP figures for the forth quarter of 2016 came at +6.8% vs +6.7% exp and 6.7% previous, with the QoQ reading for Q3 coming at +1.7% vs +1.7% exp and +1.8% last.
With regards to retail sales YoY, the number was in +10.9% vs 10.7% exp and 10.8% last, with industrial output YoY at 6% and 6.1% exp and 6.2% last. Meanwhile, urban investment YoY stood at +8.1% vs 8.3% expected and 8.3% last.
While infrastructure investment, financed by fiscal expansion, has been a major contributor to recent growth, private sector investment remains one of the sticking points limiting further growth in China.
However, as long as macro economic policies in China remain aggressively expansionary, as has been the case in the last 12 months, it continues to support strong growth in the country.
Worth noting, in the mid to long term, the policies China has embarked upon continue tocarry an increasingly high risk of a sudden slump in the country's growth trajectory, as the debt to GDP ratio expands at an unsustainable rate.
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