Decent momentum gives hope in a challenging year

While both global trade and China's economy enter 2017 with decent growth momentum, we expect GDP growth to ease to 6.3 percent this year due to a harsher climate for China's exports in the United States, slower real estate investment and, importantly, a change in tone of policymakers toward somewhat less emphasis on growth.

Real GDP growth edged up to 6.8 percent year-on-year in the fourth quarter of 2016 as services output momentum picked up. This brought whole-year GDP growth to 6.7 percent, down from 6.9 percent in 2015 but comfortably exceeding the "bottom line" of the 6.5 to 7 percent target range.

However, this was at the cost of a further rise in leverage. Overall credit - total social financing excluding equity financing, but including local government bond issuance - grew 16.1 percent in 2016.