Economy slows, but activity data eases concerns
CHINA’S economy grew at its slowest pace in more than five years in the third quarter, official data showed yesterday, but major activity indicators in September point at stabilization, easing concern over the future of the world’s second-largest economy.
Analysts said the third-quarter growth of 7.3 percent — the weakest since the first quarter of 2009 — was led by the property sector. It compared with the rise of 7.5 percent in the second quarter and 7.4 percent in the first three months.
However, massive policy easing is unlikely due to recent stabilization, and the country will stick to its efforts on economic restructuring on the road to a state of “new normal,” analysts said.
In the first three quarters, China’s gross domestic product amounted to 41.99 billion yuan (US$6.8 billion), up 7.4 percent on an annual basis.
“Despite the slowdown in the third quarter, China’s economy managed a generally stable growth this year with relatively low inflation and high employment,” said Sheng Laiyun, spokesman for the National Bureau of Statistics.
Sheng said the third-quarter moderation was the result of the high comparative base last year, the deepening of economic restructuring and a weak real estate market.
Zhou Hao, an economist at Australia & New Zealand Banking Group Ltd, said that the growth looked dismal, it was better than expected.
Wang Tao, an economist at UBS, described the third-quarter growth as “not so bad.”
According to the statistics bureau, industrial production in the month expanded 8 percent from a year earlier, up from the pace of 6.9 percent in August. Retail sales grew 11.6 percent, keeping up with the increase of 11.9 percent a month ago. Fixed-asset investment, meanwhile, accelerated 18.3 percent in the first three quarters, faster than the gain of 16.5 percent in the January-August period.
“Looking ahead, we see that China’s growth momentum will pick up modestly in the final quarter, as massive policy easing is unlikely,” Zhou said.
However, Wang said growth may decelerate further in the next few months due to a continued property downturn and its associated negative impact on the economy.
Tang Jianwei, an economist at the Bank of Communications, said the rebounding trade performance, the improved industrial structure and better production efficiency in the country will sustain growth momentum in the fourth quarter at around 7.4 percent.
Sheng said China is adapting itself to “new normal‚“ a state of slower growth but of higher quality.
“China’s economy is undergoing big changes, with more weight of service industry, bigger contribution of consumption, better allocation of wealth, more balanced regional development, and less energy-consuming sectors,” Sheng said.
In the first three quarters, China’s service sector expanded 7.9 percent, faster than either the manufacturing or agriculture sectors, which grew 7.4 percent and 4.2 percent respectively.
People’s disposable income rose 10.5 percent to 14,986 yuan in the first nine months, and more than 10 million new jobs were created.
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