China's economy grew at a faster pace than expected in 2017 despite measures by the government that were expected to have slowed growth in the fourth quarter, official data showed on Thursday.
Fourth-quarter gross domestic product (GDP) data showed the world's second-biggest economy grew at an annual rate of 6.8% in the final three months of 2017, matching the previous quarter's figure, but beating expectations of a dip to 6.7%.
Growth in 2017
Over the full year, China's economy grew at a rate of 6.9% - its highest in two years - topping the government's conservative target of 6.5% and higher that 2016's rate of 6.7%. Analysts polled by Reuters had expected a rate of 6.7% for 2017.
"The economy is cruising along at impressive speed, breezing past potential speed bumps with apparent ease," said Frederic Neumann at HSBC Holdings.
"If China keeps up its current speed, the next stop will be inflation. Some cooling of growth momentum at the start of 2018 would thus be welcome to curtail price pressures."
Many had lowered expectations for fourth-quarter growth after Beijing announced measures to cut pollution in some China's biggest industrial cities during the winter.
The measures, which included temporary closures of highly-polluting industrial facilities such as steel mills, showed up in Chinese factory data and purchasing manager surveys for December.
Meanwhile, at October's five-year Communist Party Congress, China declared it would put less emphasis on long-term economic growth targets, which have led to a build up of debt, to focus on higher-quality, domestic-driven growth and investment.
Regulatory clampdowns are now affecting the financial sector, initial public offerings and share ownership.
Growth in 2018
Some analysts suspect the effects of such measures may have lagged the fourth-quarter data collection and will begin to make themselves felt in the first quarter of 2018.
"Some of these moves will be positive for shareholder value in the longer term and will help to cleanse the financial system," said Freya Beamish at Pantheon Macroeconomics.
"But the immediate impact will be to tighten liquidity conditions further and contribute to a systemic tightening of monetary conditions."
China's equity markets were broadly welcoming of the news. The mainland benchmark Shanghai Composite rose 0.91% to 3,475.91, while the Hang Seng in Hong Kong rose 0.46% to 32,129, led by banks and insurance companies.
The renminbi was unmoved against the dollar at Rmb6.4330.