China Economic Quarterly Q1 2018

Stable Q1 2018 economic figures kick off 40th anniversary of China’s reform and opening up

The China Economic Quarterly is a quarterly market outlook prepared by PwC to share the latest economic and policy updates. This issue provides an analysis of major economic data points in China for Q1 2018. It also summarises main policy developments and discusses hot topics of interest. China’s year-on-year GDP growth in the first quarter of 2018 again increased by 6.8%, the same rate as the third and fourth quarter of 2017.

Major economic indicators

Here are some highlights of the Q1 updates:

  • Total GDP reached 19.87 trillion yuan (about US$3.15 trillion). We expect overall GDP growth in 2018 to stay steady, despite the current trade friction between China and the US.
  • Services continued to play a leading role in driving China’s economic growth, with an impressive growth rate of 7.5% year-on-year.
  • Real estate market started to cool down: the growth rate of land purchased and resources of funds only increased by 0.5% and 3.1% respectively.
  • The growth of Industrial Added Values for companies over certain scales went up by 6.8% (in real terms) year-on-year.
  • China’s imports and exports continued to perform relatively well. Total imports and exports reached 6.75 trillion yuan, increasing by 9.4% over the same period last year.


China’s quarterly policy updates

Further opening up of the financial sector

The recent measures announced by Yi Gang, Governor of the People’s Bank of China, will further open up the banking, asset management, securities, mutual fund management, futures, and insurance industries to foreign companies. China’s capital markets are also making progress to be more internationalised. As a result, we expect China’s financial sector would be more competitive and efficient in the next few years. Ultimately, the financial sector would get better at serving the real economy and boosting economic growth and development.

Hainan aims to be China’s Hawaii with the support of policy measures

In 2017, Hainan attracted about one million international tourists. A new 30-day visa-free policy was implemented for citizens from 59 countries starting 1 May 2018. “China welcomes investors worldwide to invest and start their business in Hainan and participate in the building of a free trade port there”, says China’s President Xi Jinping at a celebration marking the 30th anniversary of the establishment of Hainan Province.


Hot topic analysis

“Life begins at forty”-- China’s reform and opening up to reach historic highs in 2018

A few weeks ago, President Xi called for further boosting China’s opening up during a keynote speech at the opening ceremony of the Boao Forum for Asia. Taking a broad view of a series of announced and upcoming reform measures, it is certain that China’s reform and opening up will reach historic highs in 2018.

Policy measures will unleash economic vitality in many sectors and fields which will become a major force for economic development in the next ten to twenty years. These measures will have a dramatic impact on China’s current and future economy, as well as on the whole of its society.


Contact us

Thomas Leung

Mainland China and Hong Kong Managing Partner - Markets, PwC China

Tel: +[86] (10) 6533 2838 / +[852] 2289 8288

Elton Huang

Managing Partner, Central China Markets Leader, Shanghai Office Lead Partner, Entrepreneurial and Private Business Co-Leader, PwC China

Tel: +[86] (21) 2323 3029

Elton Yeung

Vice Chairman, Strategy and Innovation Leader, PwC China

Tel: +[86] (10) 6533 8008

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