The future of China’s economic growth is personal, JPMorgan’s Jing Ulrich says
- Consumption and services will continue to drive expansion, taking over where investment and exports left off, executive predicts
China’s economy may be slowing but the bigger issue is where the growth is coming from, according to Jing Ulrich, managing director and vice-chairwoman of Asia-Pacific at JPMorgan Chase.
China’s economy grew 6.4 per cent year on year in the fourth quarter, according to official data released in January. The rate has been falling steadily over the past decade, since its high of 14.2 per cent in 2007.
JP Morgan has forecast China’s economy to expand by 6.2 per cent this year.
Ulrich said personal consumption contributed to about 75 per cent of the fourth-quarter growth in 2018, while investment made up much of the rest. Some analysts saw net exports contributing nothing to growth, she said.
“[For] China’s growth, the trajectory is definitely on the softening trend because the sheer size of the economy means that it cannot continue growth at double-digit rate,” she said.
“In future years the growth can be 6 or even 5 per cent ... but we must look at where the growth actually comes from.
“Today, personal consumption has been so much more important in driving China’s GDP growth and this transition will continue – [with China] becoming less reliant on investment and exports and more reliant more on personal consumption and services.”
