Schroders Chief Economist on the Outlook for 2018
Keith Wade, the chief economist at Schroders, shared his thoughts with Apple Daily recently on the Chinese economic outlook for 2018, including the GDP, the economy, the possibility of a credit crisis, and U.S. protectionism.
Against a backdrop of the healthy global economy, Wade believes the Chinese economy will perform well in 2018.
"For next year, we think China will probably grow about 6.3 to 6.4 percent, which won't be too bad. We may see some adjustments to the growth targets, but I think it will still be quite a good year for China growth. China has said it will double incomes as one of the targets by 2020. So, to do that, you need to have growth of just over 6 percent. I think they will try to stick to that target," Wade said.
Real Estate Growth Slackens, Manufacturing Sector Reinvigorates
Wade said he expects China will focus on stabilizing growth and adjusting structures next year. Chinese consumption will grow reasonably to prop up the economic growth. Wade believes it's a good signal that Chinese economy has grown well in 2017. Yet, China still has to keep up with its structural adjustment. He estimates real estate growth in China will show signs of slackening, offset by the reinvigoration of manufacturing industry.
Wade thinks that the major risk in China will be the credit crisis. The portion of bad debt in China's massive debt pile should not be overlooked. If the banks are forced to choke off the supply of credit to the economy, the economy will be adversely impacted. Yet, the high national savings rate in China gives the Chinese banks room for their loan businesses, therefore a sudden credit squeeze is improbable.
U.S. trade protectionism
Wade also touched on the effect of U.S. trade protectionism on China. Wade believes such attempts will be the last resort for the U.S. to achieve its political ends in particular issues.
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