China’s economy grew a faster-than-expected 6.8 percent in the fourth quarter, boosted by higher government spending and record bank lending, giving it a solid tailwind heading into what is expected to be a turbulent year.
But Beijing’s decision to raise spending to meet its official growth target could exact a high price, as policymakers grapple with financial risks created by an explosive growth in debt.
The fourth-quarter figure is the first time in two years that the world’s second-largest economy has shown an uptick in growth, but this year it faces further pressure to cool its housing market, the impact of government efforts at structural reforms, and a potentially testy relationship with a new U.S. administration.
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