China fourth quarter GDP growth beats forecasts, but some economists sceptical

China's economy grew more quickly than expected in 2017, according to both official and private sector estimates, but some economists believed the official figures belied the extent of the slowdown in the fourth quarter.

According to the National Bureau of Statistics, the rate of expansion of Asia's largest economy was steady in the fourth quarter of last year at an annualised pace of 6.8%, beating economists' forecasts for a slight slowdown to 6.7%.

And for all 2017 GDP growth clocked in at 6.9%, against growth of 6.7% in 2016.

Yet some economists believed the official data was masking the extent of the slowdown in GDP at the tail-end of 2017.

According to Julian Evans-Pritchard, Capital Economic's senior China economist, their own China Activity Proxy suggested GDP growth had slowed from a 6.0% pace over the three months to September to a 5.3% clip in the fourth quarter.

On a more positive note, Capital Economic's own estimate of China's economic growth in 2017 of about 6.0% was considerably lower than Beijing's, but the pick-up in the pace of the expansion compared to growth of around 5.1% in 2016 had been much larger too.

Be that as it may, Evans-Pritchard believed a further slowdown was on the cards over the course of 2018.

Retails sales, Industrial production ...

Most of the other key economic indicators released on Thursday also printed ahead of forecasts.

Thus, the rate of growth of industrial production accelerated by one tenth of a percentage point in December to hit a year-on-year pace of 6.2% (consensus: 6.1%), while fixed asset investment for all of 2017 advanced by 7.2% (consensus: 7.1%), implying an acceleration from 6.3% to 7.2% for December.

Retail sales on the other hand slowed down, with the year-on-year rate of growth decliing from 10.2% for November to 9.4% in December.

"On balance though, there is nothing in today’s data to convince us that the economy didn’t slow a fair bit last quarter. Looking ahead, we think tight monetary conditions and slowing credit growth will continue to weigh on the pace of economic expansion in coming quarters. Indeed, we expect growth to average a mere 4.5% this year, though investors will probably need to look beyond the official GDP figures for evidence of this," he told clients.