Thu Jan 18 01:00:00 CST 2018

Consensus Actual Previous
Y/Y % Change 6.7% 6.8% 6.8%
Q/Q % Change 1.6% 1.7%

China's economy expanded at a steady pace in the three months to December, with year-on-year growth in gross domestic product recorded at 6.8 percent, unchanged from the three months to September and just above the consensus forecast of 6.7 percent. GDP grew 1.6 percent on the quarter, down from the 1.7 percent increase recorded in the three months to September.

Today's data continues the recent pattern of remarkable stability in Chinese economic growth data, with the year-on-year change in GDP reported at between 6.7 percent and 7.0 percent in every quarter since the start of 2015. Monthly data for December, also published today, showed solid growth in fixed asset investment and industrial production but a sharp drop in retail sales growth. Recent PMI survey data have also provided more mixed indications about the strength of economic activity.

Annual GDP growth for China in 2017 is estimated to have been 6.9 percent, in line with the estimate made last week by Chinese Premier Li Keqiang and consistent with the target set early last year of "around 6.5 percent or higher". At annual meetings of the Communist Party held last month, Chinese President Xi Jinping pledged his support for further structural reforms in the domestic economy, including efforts to boost household consumption and to promote higher-value production in the Chinese manufacturing sector.

Gross Domestic Product (GDP) refers to the final products at market prices produced by all resident units in a country (or a region) during a certain period of time. GDP is the core indicator of the national accounts, and also an important indicator to measure the economic conditions and the level of development of a country or region. GDP is calculated from three approaches -- production, income and expenditure -- which reflect gross domestic product and its composition from different angles.

GDP is the all-inclusive measure of economic activity. The GDP report contains a treasure-trove of information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. GDP components such as consumer spending, business and residential investment, and price (inflation) indexes illuminate the economy's undercurrents, which can translate to investment opportunities and guidance in managing a portfolio.

The data are compiled by NBS and the People's Bank of China (PBoC). Estimates for non-financial corporations, financial corporations, general government, household and the rest of the world sectors are published. The production accounts, distribution and use of income account, and capital account data are compiled by NBS. NBS also develops the financial account by rearranging financial transactions data in the flow of funds accounts compiled by PBoC. There are no breakdowns of government consumption expenditure, gross fixed capital formation, change in inventories and net exports. Household consumption expenditures are broken down into urban and rural. The income components of GDP are only published in the input-output tables. NBS uses the Chinese Industrial Classification of the National Economy.