China’s gross domestic product (GDP) rose by 6.9% in 2017, reversing a downward growth trend for the first time since 2010 in an indication of strong resilience. In nominal terms, GDP rose by 11.2% to CNY82.7 trillion from CNY74.4 trillion in 2016, the National Bureau of Statistics (NBS) said. The strong performance is expected to give the government more room to tackle debt and financial risks in 2018, which President Xi Jinping said was a “critical battle” to fight.

Iris Pang, Chief Greater China Economist at ING, said the possibility of a “crisis” had been largely removed, but Beijing still needed to be cautious as it continued with its process of financial deleveraging. “The deleveraging is set to eliminate financial risks, but the authorities should not do it in haste as that could generate new risks,” she said. The GDP expansion meant China’s economy grew to about two-thirds the size of the United States’ last year, and at the current rate could overtake it within the next decade. The accelerated growth in 2017 is set to give President Xi Jinping fresh confidence in Beijing’s growth model. “In the current world, ‘democratic deficit’, ‘governance deficit’ and ‘development trap’ rise one after another, while problems like the rich-poor gap, terrorism and climate change keep emerging,” an article in the People’s Daily said. “The international political and economic system dominated by capitalism is flawed and needs deep reform. The new international order is budding. China’s practices offer a new choice to solve common problems facing all humankind.”

China’s per capita income rose 9% in 2017 to CNY25,974, the NBS added. Raymond Yeung, Chief Greater China Economist of ANZ Bank, said the current growth momentum was likely to continue in 2018 – with 6.5% growth forecast for the year – but the government would remain focused on reducing debt. “Risks to the economy, like debt, will be a top priority this year,” he said. Under “Xiconomics”, Beijing has downplayed GDP growth targets in favor of “quality” growth, sustainable development and greater transparency in auditing, as several provinces and cities have been found falsifying economic data, the South China Morning Post reports.

The services sector led growth with an increase of 8%, outpacing the industrial sector’s 6.1% and the agricultural sector’s 3.9%. Services continued to make up 51.6% of the country’s GDP.

Fixed-asset investment rose 7.2% year-on-year, down 0.9 percentage points from 2016. Private investment reached CNY38.15 trillion, up 6% year-on-year, 2.8 percentage points faster than the previous year, accounting for 60.4% of total investment. Online sales of physical goods rose 32.2% to CNY7.18 trillion, amounting to 15% of total retail sales, 2.6 percentage points higher than 2016. Earlier data showed China’s consumer inflation was 1.6% last year, cooler than the 2% for 2016, while the factory-gate prices rose for the first time in six years. Foreign trade recorded its first expansion in three years under strong domestic and external demand.

The Chinese government should lower the country’s expectations for gross domestic product growth and push forward reforms at state-owned enterprises (SOEs), both key for addressing China’s mounting credit and debt problem, according to Paul Gruenwald, Chief Economist at S&P Global Ratings. “Most of the debt is from the corporate sector, especially the SOEs,” he said. Gruenwald said the market should also play an essential role besides the government in containing excessive borrowing