China's economic growth is predicted to be around 6.5% in 2017, lower than 2016. Growth will be steady throughout the year, with the tertiary industry growing the most at 7.5%. Consumption and capital formation will contribute most to GDP growth. Exports are expected to decrease by 6.1% while imports decrease by 3.5%, leading to a lower trade surplus of $471.7 billion. Inflation is predicted to be around 2.3% for CPI and 2.4% for PPI. Commodity prices are forecasted to rise overall in 2017.

1. CEFS by Chinese Academy of
Sciences
China Economic Forecast for
2017

2. China’s economic growth will be steady in 2017,
the year on year growth rate of China’s GDP is
predicted to be around 6.5 percent in 2017, which
is 0.2 percentage point lower than that of 2016.
The growth rate of the primary industry is projected
to be 3.7 percent, 6.0 percent for the secondary
industry and 7.5 percent for the tertiary industry,
respectively. The final consumption expenditure,
gross capital formation and net export will
contribute 4.5, 2.4 and –0.4 percentage points to
China’s GDP growth rate respectively. China’s
economic growth will present a high to low
tendency during the whole year of 2017. From the
first to the fourth quarter of 2017, China’s GDP
growth rate will be around 6.6 percent, 6.4 percent,
6.4 percent and 6.5 percent respectively.

3. The decreasing trend of the cumulative growth rate of
fixed assets investment has been curbed since 2016. It
is expected a status of being stable and getting better of
investment in 2017. Meanwhile, the growth rate of
investment in the fixed assets is more likely to slow a
slight fluctuation. The annual investment growth rate of
2017 is estimated to remain at around 8.5 percent.

4. Under the new normal China has entered into an
important stage that the consumer demand continues to
grow the upgrade of consumption structure is
accelerated, the role of consumption is driving the
economic growth is enhanced significantly. The final
consumption expenditures will present the smooth
growth trend in 2017. It is estimated that the final
consumption expenditures would be about 42836.9
billion Yuan in 2017, its growth rate would be about 9.0
percent in 2017.

5. In 2017, under the most likely scenario that
China’s macro economy is on the right track,
with growth rate around 6.5 percent, recovery
of world economy will be slowdown, and RMB
continues depreciation but keeps relatively
stable, total exports and imports in 2017 are
expected to be around 3.53 trillion US dollars,
down 5.0 over 2016, leaving a decreasing
trade surplus with 471.7 billion US dollars.
Exports are expected to be around 2.00 trillion
US dollar, 6.1 percent down over 2016, while
imports are expected to be around 1.53 trillion
US dollars, and 3.5 percent down respectively.

6. Under optimistic scenario with China’s GDP growth rate
reaching 6.7 percent in 2017, China’s export and import
growth rate are expected to increase by 2.2 and 2.9
percentage points relative to the most likely scenario.
On the other hand, under pessimistic scenario with
China’s GDP growth rate 6.4 percent up in 2017,
China’s export and import growth rate are expected to
decrease by 3.0 and 2.8 percentage points relative to
the most likely scenario.

7. Under the condition there does not happen the large
unexpected shocks, CPI in 2017 is expected to rise
about 2.3 percent and PPI and PPIRM are both
predicted to rise about 2.4 percent. The CPI will go
smooth in the first half of 2017, and will increase in the
second half, whereas PPI and PPIRM will go towards
on opposite direction.

8. Global commodity price is expected to rise in 2017. In
particular, under the reference scenario with the
acceleration of in 2017, global economic growth will
accelerate moderately, and a strong US dollar, we will
occur because the Federal Reserve will lift interest
rates. It’s expected that the average RJ/CRB index in
2017 will be around shift from 180.6 in 2016 to 200, up
11 percent over the average in 2016’s average.
Specifically, in terms of commodities, the WTI crude oil
futures price is expected to average reach an averaged
53 U.S. dollars per barrel, up 22 percent from 2016’s
average, and LME copper futures price is also expected
to rise from the average in 2016.

9. It is expected that China’s commodity house average
prices will be around RMB 7687 per square meter in
2017, a year on year rise 3.4 percent. Specially, the
China’s average house prices will be around RMB 7435
per square meter in 2017, a year on year rise of 4.1
percent. Under the effect of regulatory policies, the
sales area of commercial houses is expected to rise
slowly, and the growth rate of the new construction area
in 2017 is expected to be higher than that in 2016.

10. China’s grain sown area is expected to decrease in
2017. On the condition with moderate weather, the grain
output in 2017 is expected to drop by 5 million tons, of
which the output of summer crops (mainly wheat) is
expected to maintain or grow slightly, while the output of
autumn crops (maize, rice, etc.) may suffer a decline.
The cotton sown area is predicted to maintain or decline
slightly in 2017, while the output will maintain or grow
slightly in moderate weather condition.

11. The sown area of oil bearing crops is predicted to
slightly increase in 2017, in which the snow area of
rapeseed would go down, and of peanut go up. The
yield is expected to increase with moderate weather
during the growing season.
Reports can be found at CEFS by CAS.