China's economy ended 2016 on a positive note, supported by consumer spending and a booming property market, and remained a key engine for global economic expansion.
China's economy grew 6.7 percent year on year in 2016, a slowdown from the 6.9-percent growth registered in 2015, National Bureau of Statistics (NBS) data showed on January 20.
The growth, although it was China's slowest annual expansion in 26 years, is likely to top all other major economies, according to a report released in January 16 by the International Monetary Fund (IMF).
It was in line with China's official target range of 6.5 to 7 percent for 2016 and much stronger than some doom-mongers had predicted at the start of 2016, when concerns about a collapse in China's growth rocked global financial markets.
The figure represents a medium-high level of growth and China's economy continued to run within a reasonable range, with its structure further optimized and development model transformed, NBS chief Ning Jizhe said at a press conference. The NBS said the figure indicated "a good start" for the country's goal of achieving at least 6.5-percent annual growth during the 13th Five-Year Plan period (2016-2020).
China's economy has entered a new phase, which Chinese leaders have dubbed the "new normal," as the country tries to transition its export- and investment-driven growth model into one that draws strength from consumption, innovation and the service sector.
Such a transition is bound to be painful and bumpy. Yet, there are plenty of indications that China is progressing in the right direction.
Gross domestic product (GDP) totaled 74.41 trillion yuan ($10.83 trillion) in 2016, with the service sector accounting for 51.6 percent. Consumption contributed 64.6 percent to GDP growth last year. High-tech industries posted fast expansion.
Despite a protracted slowdown, China's contribution to the world's economic growth may again top that of all other economies, even exceeding the figure for all developed economies combined.
According to the report, the IMF revised its forecasts for China's growth upward by 0.3 percentage point to 6.5 percent for 2017.
With the IMF predicting only 3.1 percent global growth for 2016, China's contribution would account for more than one third of the world's growth.
For the fourth quarter, China's economy grew 6.8 percent, slightly beating market forecasts and representing the first quarterly improvement since the second quarter of 2014.
NBS data showed that major economic indicators softened last year, with industrial output growth slowing slightly to 6 percent from 6.1 percent in 2015.
Urban fixed assets investment continued to cool, rising 8.1 percent year on year, compared with 10 percent in 2015. Retail sales rose 10.4 percent, down from 10.7 percent in 2015.
However, property development investment increased 6.9 percent year on year in 2016, up from only 1 percent in 2015.
"We should be aware that the domestic and external conditions are still complicated and severe, and the foundation of the economic stabilization and improvement is not solid yet," Ning said.
China has made "seeking progress while maintaining stability" the main theme for its economic work in 2017, pledging to push for substantial progress in supply-side structural reform, according to the Central Economic Work Conference held in December 2016.
For the year ahead, analysts said China's economy may face downward pressure from a property market correction and the government's resolve to defuse financial risks and push through structural reform, which could help sustain longer-term growth but may weigh on near-term growth.
Given more efficient fiscal spending, HSBC expected the property market correction to drag China's growth down by 0.1 to 0.2 percentage points in 2017.
Adding to concerns is external uncertainty, with U.S. President Donald Trump threatening to add trade tensions.
"I personally believe Trump will consider issues from the perspective of developing mutually beneficial bilateral ties and advance the long-lasting cooperation between the two major countries," Ning said. "I have hopes for that."