2017.01.1923:29:00UTC+00China Economy’s 2016 Growth in Line with Official Target

Fueled by higher fiscal spending and record-high levels of bank lending, China's economy expanded by 6.8% in the fourth quarter. During the period, GDP rose 1.7% on a quarterly basis, a slowdown from the 1.8% growth seen in July to September, according to data from the National Statistics Bureau.

In an annual basis, the second-largest economy expanded by 6.7%, a rate that is in line with Beijing's official target ranging between 6.5% and 7%. Despite meeting official targets, GDP growth in 2016 marks the slowest growth in over 25 years and follows a 6.9% expansion seen a year earlier.

However, Beijing's decision to increase its spending by twofold in order to hit its growth targets is seen to have grave repercussions, as they are now faced with the problem of abating the looming financial risks stemming from an explosive increase in credit.

China's growth, which is considered as a key driver of global economy, also faces heightened uncertainties as its once booming housing market cools and as the government's effort to push through complicated structural reforms to diffuse other deep-rooted problems pull down short-term growth.