China’s economy grew at its weakest pace since the global financial crisis in July-September, official data showed Monday, fuelling speculation Beijing will unveil fresh stimulus measures.
Advertisement
China’s National Bureau of Statistics released the country’s third quarter GDP growth rate today, and at 6.9% it was the lowest quarterly growth the country has clocked in more than six years, or since the first quarter of 2009.
That hardened expectation that China would avoid an abrupt fall-off in growth, with analysts predicting a more gradual slide in activity stretching into 2016.
The current economic shift in China from fixed capital investment driven growth is still a “challenging transition”, he says.
China has already cut interest rates five times in a year and reduced the amount of cash banks must hold in a bid to boost lending.
China’s GDP expanded 6.9 percent in the third quarter of 2015, lower than 7 percent in the first half of the year.
An official spokesman described third quarter growth as a “slight slowdown” but said the economy was still running within a “proper range”.
President Xi Jinping told Reuters in an interview at the weekend that the government had concerns about the economy and was working hard to address them. We’re reluctant to take away any broader directional implications for Treasuries from the Chinese data, other than simply the passing of a risk-event that might have pointed to a more troubling outlook for economic growth from the region. “The GDP beat is surprising, given that the monthly FAI and industrial production figures slowed considerably, and much faster than expected”, said Oliver Barron, a China policy researcher at NSBO in Beijing.
“What keeps China going at the moment is consumption but this cannot fully offset those negative pressures on growth and therefore – even though we see a few stimulus coming from the government and we see that having a few impact – it’s not enough to prevent growth from sliding further”. Retail sales, however, were up with annual growth of 10.9 percent in September, slightly above analysts’ prediction of 10.8 percent. The country’s traditional growth drivers – manufacturing and housing construction – have recently become among the biggest drags on its economy, the world’s second largest after the United States.
Advertisement
In the government work report, released in March, Premier Li Keqiang identified mass entrepreneurship and innovation as new engines for economic growth.
