The People’s Bank of China has increased a number of key money-market interest rates, and any further cuts in the official policy lending rate this year is broadly unexpected. House purchase restrictions have also been rolled out on a much wider basis across the country.

Credit growth has so far remained rapid, but the tightening of monetary conditions and housing restrictions will lead to slower growth over the course of 2017.

"Monetary and housing policy easing were key drivers of the recovery last year, and while we are not anticipating any rise in official policy lending rates, a growing share of borrowing in the economy is tied to money-market interest rates," Fitch Ratings commented in its latest research report.

Ongoing central government fiscal support, a reduced housing inventory overhang and the resilience of consumer spending all point to the growth adjustment being gradual. But real fixed asset investment slowed at the end of 2016 and will likely dip further this year as credit growth slows. GDP growth is expected to fall to 6.3 percent in 2017, a downward adjustment of 0.1pp since the November 2016 GEO. The possibility of punitive trade restrictions under the Trump administration is a key downside risk.