# data[].attributes.body
GROSS DOMESTIC PRODUCT

# data[].attributes.attachment_link.readable_text
BEIJING: China's GDP continues to decelerate, with a growth forecast of 6.6 per cent for 2017, as it transitions from an export and investment based economy to one based on domestic consumption, the International Monetary Fund (IMF) said on Tuesday.

In its latest report on the Asia-Pacific, the IMF said that despite its own growth slowing amid economic transition, China continues to drive global growth, Efe news reported.

According to the IMF data, China's GDP grew by 7.3 per cent in 2014, 6.9 per cent in 2015 and 6.7 per cent in 2016, while growth projections for 2017 and 2018 are 6.6 per cent and 6.2 per cent respectively.

"This slowdown is predicated on a cooling housing market, partly reflecting recent tightening measures, weaker wage and consumption growth, and a stable fiscal deficit," it said.

IMF experts believe the transition will have negative effects in the short term for most exporting countries, such as South Korea and Malaysia, but in the long term will be beneficial, especially for the import of consumer goods and services, as well as tourism.

The slowdown in large investments and exports in China, which currently imports 40 per cent of metals and 10 per cent of the world's oil, will affect raw material prices, according to the report.

China's Consumer Price Index grew by 2 percent in 2016 and the forecast for 2017 and 2018 is 2.4 per cent and 2.3 per cent respectively.

The IMF warned of some risks to the Chinese economy such as the ageing of its population, a phenomenon it shares with several countries in the region, and the protectionist stance of the US.

# data[].attributes.attachment_link.title
China's continues to decelerate amid transition to consumption-based economy: IMF

# data[].attributes.attachment_link.description
BEIJING: China's GDP continues to decelerate, with a growth forecast of 6.6 per cent for 2017, as it transitions from an export and investment based economy to one based on domestic consumption, the International Monetary Fund (IMF) said on Tuesday.

# data[].attributes.body
On the overall, China's GDP has been decelerating. Between 2014 and 2015, the GDP's  percentage decrease from 7.3% to 6.9% to 6.7% in 2016 and to 6.6% in 2017. This is due to the decrease in nation's domestic consumption due to weaker wages and increasing CPI.CPI grew by 2% in 2016 , and estimated growth of 2.4% in 2017 and 2.3% in 2018. There's been a stable fiscal deficit and also falling investment rate. " A fascal deficit occurs when a government's total expenditures exceed the revenue that it generates, excluding money from borrowings."  The fascal deficit happens due to a slowdown in the economy. Consumption increase, which means that more goods and services are provided to meet the  increasing demands of consumers.

Thus, government spend more on the imports of goods and services. The generated revenue also decreases which led to a fiscal deficit. As China wanted to shift her focus from exports to domestic consumption, the revenue made from exports decreases as less goods and services are imported form China to other countries. Hence since consumption, investments and net exports have been falling , it led to an eventual fall in GDP rate.

China wants to divert their focus on exports to consumption. Due to the transition from an export dependent economy to one focused on domestic consumption, hence GDP falls due to time needed to transition.

Trade is very important to China because China currently import 40 per cent of metals and 10 per cent of the world's oil and China also currently exports goods and services to exporting countries such as South Korea and Malaysia. Both imports and exports help China to generate revenues, thus it is important for China to maintain trade.

Fiscal Deficit . (n.d.). Retrieved June 29, 2017, from http://www.investopedia.com/terms/f/fiscaldeficit.asp

# data[].attributes.body
INFLATION

# data[].attributes.attachment_link.readable_text
When we hear about inflation, it is mostly painted as a social and economic ill, eating into consumers' spending power and, if very high, creating confusion in the marketplace. However, China is currently suffering from low inflation and the central bank is hoping for a rise in this core indicator, which will act as a sign that consumer demand is picking up. Boosting consumption is a central aim of the current economic program, and any sign that consumers are increasing their purchases of items like food, recreation, and transportation is celebrated.
Wither inflation?
China's Consumer Price Index likely grew about 0.8% year-on-year in March, according to the Bank of Communications; the official measure will be released on April 12. The official target rate is 3%, and monetary policy is often loosened or tightened depending on whether inflation is over or under this rate. This inflation rate is particularly low. While it may be explained to some extent by declining food and tourism prices in the wake of the Spring Festival, March's rate was below trend, indicating broader forces pushing down demand.

January's consumer price inflation rate of 2.5% was the highest since May 2014, but still far under the rising producer price inflation rate of 6.9% in January and 7.8% in February, suggesting higher costs of production. This means that producer prices increases, reflecting cost increases in mining, steel, gas and oil production, have not passed through to consumer prices. Analysts do not necessarily expect them to, as consumer prices are driven by food and services. This means that we can't view growing producer prices as a potential stimulus for inflation.
Slow retail sales
The central bank is still holding out for higher consumer prices, which would reflect higher demand for consumer products. Retail sales growth has been the slowest in 11 years, at 9.5% year on year in January and February, with auto sales actually moving down by 1%. Growth in the services sector declined due to a sharp pickup in competition. Although lower prices due to heightened competition is considered good for consumers, other factors are more concerning. One of these is that income growth hasn't kept up with consumption growth, and will act as a drag on retail spending until workers' pay rises. Average yearly GDP per capita remains below $8,000, under the $12,000 minimum income to be classified as middle class.

The government has been strenuously encouraging domestic consumption to create self-sustaining growth and economic stability. This is supposed to accompany a large structural change from a manufacturing to a service-based economy, with stronger purchases of domestically produced goods and services. However, this major transformation has been slow-going for the services sector despite growing competition in some areas, and appears to be facing headwinds in pushing forward demand.
Can't wait to raise rates
Just looking at financial factors, it's time to raise interest rates. China's debt is mounting, due to the availability of easy, low-interest rate loans. But if consumption remains subdued, raising rates will have the effect of prioritizing saving over spending.

When consumption picks up, and inflation rises to over 3%, the People's Bank of China can then raise benchmark lending and deposit rates, which will help to reduce the glut of liquidity in China's financial system and cool demand. Currently, because of the conflicting forces of under-spending and over-borrowing, the central bank is having to get creative to combat excess liquidity in the market without dampening economic activity, choosing to target money market rates to control lending on the interbank market.
Where is demand headed?
It's not clear where consumption is headed. China's economy is slowing down, income growth remains gradual, and economic transformation is, to some extent, stalled. Despite increased consumption via the internet, the strong consumer forces that drove GDP growth since 2014 may be straining to press on. Overall economic factors may impact consumption more heavily going forward; for example, a slowdown in home purchases can negatively affect purchases of white goods and pollution-combating restrictions on automobile sales will hurt the auto sector. Lack of economic growth will negatively impact incomes and, dampen consumption.

These factors are malleable with the right mix of government policies, which should underscore market forces and supply-side reform, encourage wage growth, and make retail sales of goods and services more attractive. China's leadership may be capable of accomplishing this, but a buoyant inflation rate, highlighting growing demand, isn't in the cards, for now.

Follow me on Twitter, at @SaraHsuChina.

# data[].attributes.attachment_link.title
This Is Why China Wants Its Inflation Rate To Pick Up

# data[].attributes.attachment_link.description
When we hear about inflation, it is mostly painted as a social and economic ill, eating into consumers' spending power and, if very high, creating confusion in the marketplace. However, China is currently suffering from low inflation and the central bank is hoping for a rise in this core indicator, which will act as a sign that consumer demand is picking up.

# data[].attributes.headline
Concepts that are applicable to our topics:

# data[].attributes.subject
Concepts that are applicable to our topics:

# data[].attributes.body
GDP
INFLATION
UNEMPLOYMENT

# data[].attributes.body
UNEMPLOYMENT

# data[].attributes.attachment_link.readable_text
BEIJING China's registered urban unemployment rate fell below 4 percent for the first time in years, in a hopeful sign slower economic growth is not creating the massive unemployment Beijing fears will sow social instability.

The social security ministry said on Tuesday that 3.34 million new jobs were created in the first quarter.

The registered urban unemployment rate was 3.97 percent at the end of the first quarter, Ministry of Human Resources and Social Security spokesman Lu Aihong told a news conference.

China has kept employment generally stable even as economic growth has slowed to a 26-year low and the government shuts down outdated industrial capacity, though many analysts say the official figure is an unreliable indicator of nationwide employment conditions.

On an annual basis, the official unemployment rate was last below 4 percent in 2001, when it was 3.6 percent, according to data from the National Bureau of Statistics. The rate ended 2016 at 4.02 percent after not budging from 4.1 percent from 2010-2015.

China's leadership has touted strong jobs growth even as the economy enters a "new normal" of slower growth. Premier Li Keqiang said in March that China added 13.14 million new urban jobs in 2016 and aims to add another 11 million this year while keeping the registered unemployment rate below 4.5 percent.

That target seems safe, as China's official unemployment rate - which only accounts for urban, registered residents, and not including rural and migrant workers - last topped 4.5 percent 37 years ago in 1980 when it was 4.9 percent.

There are, however, signs of employment challenges in some sectors of the economy.

Lu said that China would need to resettle about half a million workers that lose jobs in the coal and steel sectors this year and will speed up development of a "black list" system for firms with wage arrears.

China's cabinet said last week that risks of mass unemployment in some regions and sectors have increased and pledged more fiscal and monetary policy support to address the potential rise in the jobless rate.

Workers in China's northern industrial centers have complained of being underemployed and underpaid, though not technically unemployed, as their previous well-paying jobs have gone away during economic restructuring.

A private manufacturing survey of Chinese companies by IHS Markit and Caixin have shown a mixed employment picture, with factories still shedding jobs, but at a slower pace, while services companies have been adding workers since mid-2016.

A survey-based unemployment rate published by the statistics bureau had fallen slightly over the past year to under 5 percent at the end of March.

(Reporting by Elias Glenn and Beijing Monitoring Desk; Editing by Jacqueline Wong)

# data[].attributes.attachment_link.keywords[]
monetary / fiscal policy / policy makers

# data[].attributes.attachment_link.title
China's unemployment rate falls below 4 percent at end of first quarter

# data[].attributes.attachment_link.description
BEIJING China's registered urban unemployment rate fell below 4 percent for the first time in years, in a hopeful sign slower economic growth is not creating the massive unemployment Beijing fears will sow social instability. The social security ministry said on Tuesday that 3.34 million new jobs were created in the first quarter.

# data[].attributes.body
"slower economic growth is not creating the massive unemployment Beijing fears will sow social instability"

A slow economic growth means there is lesser economic activity which includes the production as well as the demand for goods. A lower demand for goods will lead to lesser production of goods which in turn will increase the unemployment rate. This is because the "producers" which are firms, companies or factories will not need to employ the same number of workers to produce lesser goods hence workers get retrenched due to lower demand. If the demand does not increase or continue decreasing after a period of time, more workers will get fired and this would lead to massive unemployment. Massive unemployment will lead to social instability as people will get desperate due to the fact that they cannot financially support themselves or their family and resort to committing crimes such as theft thus increasing crime rates. Also, massive unemployment may lead to increased divorce rates due to the fact that the retrenched workers will be financially unstable and thus become a reason for quarrels and divorce. When massive unemployment happens, the unemployed or the country's citizens as a whole might put the blame on their government or be unhappy with the way their government handled things and thus start strikes or fights to rebel against the government which is a part of social instability.

"China's cabinet said last week that risks of mass unemployment in some regions and sectors have increased and pledged more fiscal and monetary policy support to address the potential rise in the jobless rate."

Some policies that the government will consider are unemployment benefits which is the act of providing those unemployed with some assistance while they transit to another job, employment benefits which is giving individuals incentives to work and firms incentives to hire workers, job creation which may involve the government hiring more workers directly by approving more government spending or through the use of incentives such as tax exemptions to get firms to hire more workers and improving employability which usually involves getting workers to upgrade their skills in a bid to remain employable which preempts structural unemployment.

# data[].attributes.body
“Inflation is defined as a sustained increase in the general level of prices for goods and services in a county, and is measured as an annual percentage change.” Due to inflation, there could be an increase or decrease in the general level of prices for goods and services. As mention in the article, there is an “social and economic ill”, which refers to a decrease in economic growth and could cause recession. A recession happens when the people get retrench from their paying job, and eventually lead to not being able to support themselves as there is no income earned. Due to the lack of income, it causes them to reduce their spending power.

Overall, there has been a slight growth of only 0.8% year-on-year in March. However, as compared to their official targeted rate, there is a shortage of 1.2% which is considered a huge difference as compared to the targeted rate. That maybe due to the decrease in food and tourism prices in the wake of Spring festival also known as Chinese New Year.

From the article, "January’s consumer price inflation rate of 2.5% was the highest since May 2014, but still far under the rising producer price inflation rate of 6.9% in January and 7.8% in February" shows that  the consumer price inflation rate continues to be below the producer price inflation rate, indicating there is higher costs of production, reflecting cost increases in mining, steel, gas and oil production, have not passed through to consumer prices. Increasing producer price does not necessarily result in inflation.

"One of these is that income growth hasn’t kept up with consumption growth, and will act as a drag on retail spending until workers’ pay rises."

As inflation continues, it will erode the purchasing power of money and if the income of consumer does not increase like how their consumption growth increases, they will not be able to afford all of the things that they could afford before. This will cause an impact on retail spending as people will start to be careful of what they are doing with their money and start spending lesser which means that lesser goods will be sold and retail sales will decrease.

Website Title: Investopedia, Article Title Inflation: What Is Inflation? Date Published: May 26, 2017, Date Accessed: June 28, 2017, URLhttp://www.investopedia.com/university/inflation/inflation1.asp