China’s GDP expands 6.7% in Q3
Print Edition
CHINA’S economy steadied in the third quarter, with GDP growth staying flat at 6.7 percent.
Experts argue, however, that slowing income growth might affect consumer spending and further stimulus measures to stabilize the economy could postpone restructuring.
Year-on-year growth was in line with the rate posted in the first and second quarters, the National Bureau of Statistics said.
“The national economic performance has been generally steady, making progress and improving in quality, resulting in growth that’s better than expected,” said bureau spokesman Sheng Laiyun.
Sheng said the real estate industry contributed 8 percent of total GDP growth in the first three quarters.
China’s home sales rose 43.2 percent in the first nine months of the year compared to the same period in 2015. Medium to long-term household loans, most of which could be counted as mortgages, accounted for 60 percent of new loans last quarter, up from 47 percent in the second quarter and 23 percent in the first.
“Economic growth is not a concern, as a property frenzy has topped the government’s agenda,” said Raymond Yeung at Australia and New Zealand Banking Group. “The government will now focus on capacity reduction and corporate deleveraging.”
Other performance indicators were mixed, with industrial production increasing by 6.1 percent year on year in September, compared with 6.3 percent in August. Investment in factories, buildings and other fixed assets in non-rural areas climbed 8.2 percent year on year in the January-September period, edging up from the 8.1 percent pace in the first eight months. Retail sales, helped by cuts in vehicle taxes, grew 10.7 percent in September from a year earlier, compared with 10.6 percent in August.
“September activity data were largely in line with market expectations, but showed tentative signs of momentum losing steam in our view,” said Zhao Yang, chief China economist at Nomura.
Zhao said the recent crackdown on the property market should start to put pressure on property investment and sales. Zhao estimated fourth-quarter GDP growth at 6.4 percent year on year.
Private investment rose last month after slowing from the start of the year. Investment by private firms grew 2.5 percent in the first nine months from a year earlier, faster than the 2.1 percent growth in the first eight months.
China’s GDP growth has been expected to slow as the economy transitions from manufacturing-led growth to consumption.
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