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Doing Business in China

What's driving China's economic growth this quarter?

April 19,2017 | Dave Heywood

Fresh reports indicate the Chinese economy has seen it’s strongest period of growth in 18 months, with GDP growing by 6.7% in Q1 of 2017.

 

The major highlights this quarter include:

 

  • +6.8% in industrial production

 

  • +10.9% in retail sales

 

  • +18% in new home sales

 

  • +7% in disposable income

 

watch the latest bloomberg report, covering China's Q1 performance

 

Strong market growth with clear opportunity, served with the usual pinch of skepticism by economists

 

The increase in both the value of, and purchase of property, fueled by availability of credit by state-owned banks, continue to stimulate the growth and purchasing power of middle class consumers in China.

 

This brings ever closer, the Chinese governments desire to shift the balance of the economy from being heavily reliant on state investment, to one more driven by consumption,  the uplift in retail sales by almost a percentage point higher than forecast indicate this may finally be starting to take firmer hold.

 Beijing, China cityscape at the CBD..jpeg

Data from McKinsey highlights that 54 percent of urban households will be classified as “upper middle” class (earning between US$16,000 and US$34,000 a year) by 2022,

 

It's worth noting that currently, there is some skepticism that such growth can be continued and is sustainable, with economists viewpoints' indicating that the pace of growth may slow down over the rest of the year.

 

 

In a world where other major economies such as the US and UK can typically report growth of just one or two percentage points, there’s still plenty of opportunity for foreign brands to tap into when entering the market, and more scope for existing brands to fuel further growth.

 

Download our guide to setting up a business in China

 

Further reading on China's Q1 growth

 

NY Times - China's economy grows 6.8% but warning signs persist

 

 

Fortune - China's GDP growth is booming again, but for how long?