OPEC Monthly Oil Market Report – October 2017
Graph 3 - 25: Chinese GDP growth
Graph 3 - 26: Chinese GDP breakdown
On 18 October, the
Chinese Communist Party (CCP)
will hold its 19th Party Congress in Beijing.
Appointments will be made to the Party’s powerful Central Committee (CC), Politburo and
Standing Committee (PSC)
, and the Party will decide on a five-year policy agenda. It seems some
significant economic challenges may be discussed at this Congress such as rural poverty, environmental
degradation and the economic turbulence generated by the “new normal”. China is now transitioning from
export-led economic growth to consumer-driven growth. China’s foreign policy and North Korea are also
other highlighted issues.
In terms of
, China will release a timetable and roadmap for the opening-up of 12 major
sectors to foreign investment soon. According to the State Council’s release on promoting foreign investment
in August, the 12 sectors include new energy vehicle manufacturing, ship design, banking, securities and
insurance. China's progression towards opening market access to foreign capital has been gradual.
However, at the moment, implementation of the new liberalisation policies will be carried out step-by-step,
and will only apply to Free Trade Zones. Therefore, it is unlikely to markedly change nationwide productivity
in these sectors.
Foreign direct investment
(FDI) in China contracted y-o-y during the first eight months of 2017, while
general purpose equipment, medical pharmaceutical products, raw chemical materials manufacturing and IT
services continued to expand rapidly over the same period. Further liberalisation of market access should
boost FDI in high-end manufacturing and the growing services sectors, but it is unlikely to change the
downward trend of FDI growth in traditional heavy industries.
China’s CPI inflation
rose 1.7% y-o-y in August of 2017, following a 1.4% rise in July, while the market
expected a 1.6% gain. It was the highest inflation rate since January, as the cost of non-food items rose at a
faster pace and the cost of food fell much less than in the previous month.
increased by 6.4% y-o-y, compared to a 5.6% rise in the previous three months. It was the twelfth
straight month of increase in producer inflation and the highest since April.
Sources: China's National Bureau of Statistics and
% change y-o-y
Net exports of goods and services
Gross capital formation
Final consumption expenditure
Sources: China National Bureau of Statistics and
% change y-o-y