BEIJING: China’s gross domestic product expanded in the third quarter at its slowest pace since the depths of the global financial crisis, official data showed Tuesday (Oct 21), despite efforts to kickstart the world’s second-largest economy
The 7.3 per cent year-on-year increase in July to September was lower than the 7.5 per cent expansion in the previous three months, the National Bureau of Statistics (NBS) said. However, it exceeded the median forecast of 7.2 per cent in an AFP survey of 17 economists. The result is the slowest since the 6.6 per cent recorded in the first quarter of 2009.
China’s economy is suffering from a deflating property bubble, a government crackdown on corruption and weak demand from Europe, prompting authorities to introduce monetary easing measures. But officials were quick to put a largely positive spin on the GDP figure.
The economy showed “good momentum of stable growth” in the first three quarters, said NBS spokesman Sheng Laiyun, with “progress made and quality improved”. But he acknowledged that the third-quarter slowdown was partly due to “unexpectedly greater pains brought by the structural reform” which included “still pronounced overcapacity in traditional industries” and a correction in the property market this year.
“The internal and external environment is still complicated and the economic development still faces many challenges,” he said. The NBS said the economy expanded 7.4 per cent in the first nine months of the year, and Sheng said growth had remained in a “reasonable range” as, among other factors, job creation was stable.
China’s official growth target for this year was set at about 7.5 per cent in March, the same as last year, though officials including Premier Li Keqiang have openly stated it could come in lower. The analysts polled by AFP expect the economy to grow 7.3 per cent this year, unchanged from the previous forecast three months ago but slower than actual growth of 7.7 per cent in 2013.
“The momentum of the economy bottoming out and stabilising is now relatively clear,” Ma Xiaoping, a Beijing-based economist for British bank HSBC, told AFP. “Currently there’s no risk of an accelerated slowdown,” she added.
The NBS also said industrial production, which measures output at factories, workshops and mines, rose 8 per cent year-on-year in September. That was a rebound from a more than five year low of 6.9 per cent in August. Retail sales, a key indicator of consumer spending, expanded 11.6 per cent in the same month, while fixed asset investment, a measure of government spending on infrastructure, rose 16.1 per cent on-year in the first nine months.
Authorities have since April used a series of “targeted” measures to underpin growth, on a far smaller scale that the 4 trillion yuan (now US$660 billion) stimulus package of 2008 introduced to fight the fallout from the global financial crisis.
In what has been called a “mini-stimulus”, the government has so far used targeted cuts in reserve requirements – the amount of funds banks must put aside – as well as a 500 billion yuan injection into the country’s five biggest banks for re-lending just last month.