China’s GDP expanded in the third quarter at its slowest pace since the depths of the global financial crisis, official data showed yesterday, but analysts said the world’s second-largest economy may have bottomed out.
The 7.3 percent year-on-year increase in July to September was lower than the 7.5 percent expansion in the previous three months, the Chinese National Bureau of Statistics (NBS) said, and the slowest since the 6.6 percent in the first quarter of 2009.
China’s economy — a key driver of global growth — is suffering from a deflating property bubble, a crackdown on corruption and weak demand from Europe, prompting authorities to introduce monetary easing measures.
While the headline figure will likely add to concerns about the world economy, officials were quick to put a largely positive spin on it.
The economy showed “good momentum of stable growth” in the first three quarters, NBS spokesman Sheng Laiyun (盛來運) said, with “progress made and quality improved.”
However, he acknowledged 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 bureau said GDP expanded 7.4 percent in January to September, 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 is about 7.5 percent in March, the same as last year, but the analysts polled by AFP forecast growth of 7.3 percent this year.
“The momentum of the economy bottoming out and stabilizing is now relatively clear,” said Ma Xiaoping (馬小平), a Beijing-based economist for HSBC.
“Currently there’s no risk of an accelerated slowdown,” she added.
The bureau also said industrial production, which measures output at factories, workshops and mines, rose 8 percent year-on-year last month, against a more than five-year low of 6.9 percent in August.
“This is encouraging, as of all the monthly data, industrial production has the strongest correlation with GDP growth, so this bodes well for an economic recovery this quarter,” Nomura economists wrote in a note.
Retail sales, a key indicator of consumer spending, expanded 11.6 percent, while fixed asset investment, a measure of government spending on infrastructure, rose 16.1 percent year-on-year in the first nine months.
However, Liu Dongliang, a senior analyst at China Merchants Bank (招商銀行), said the GDP figure was “a result of multi-rounds of mini-stimulus measures, showcasing that the pressure of the economic downturn is still relatively high.”
Authorities have since April used a series of “targeted” measures to underpin growth, on a far smaller scale than the 4 trillion yuan (US$660 billion) stimulus package of 2008 introduced to fight the fallout from the global financial crisis.
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