“To be sure, markets fully anticipate that third-quarter GDP will miss the 7.0 percent growth target”, Vishnu Varathan, senior economist at Mizuho Bank, wrote in a note released ahead of the data. A 36 percent rise in E-commerce spending is noticed in the third quarter over a year earlier.
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Weakening trade and manufacturing have fueled concern in China about possible job losses and unrest. This is translating into more pressure on the Chinese government to lower interest rates and a few measures to strengthen the growth rate.
Consumer spending accelerated over the course of the quarter helping to shore up the expansion. At the same time, retail sales growth rose to 10.9 percent from July’s 10.5 percent.
Europe’s main stock markets have closed mixed on Chinese stimulus hopes following news that China’s economy grew in the third quarter at its slowest pace for six years.
“Consumption continued to function as the key cushion, preventing a sharper overall slowdown”, said Louis Kuijs, head of Asia economics at Oxford Economics Ltd.in Hong Kong.
According to BBC’s Robert Peston, “it’s doubtful that if China’s economy was measured in the way we measure ours that it would be showing the 6.9% annual growth announced today”.
Financial services provided a temporary boost to growth earlier this year amid the share-buying boom but the stock market crash in August increased fears that growth would slump in this half so yesterday’s figures are causing a few economists to question the data.
According to the official figures, among the three pillar industries, the growth in agricultural and industrial sectors stood at 3.8 percent and 6 percent respectively, while the service sector saw 8.4 percent growth in the first three quarters. “Although we do not foresee China falling into a crisis, the economic growth rate is set to stay lower for longer”.
Despite the spate of easing, Monday’s GDP reading was still the worst since the first quarter of 2009, when growth tumbled to 6.2 per cent. “Industrials and manufacturing continue to face a headwind due to poor global growth while domestic consumption as evidenced by September’s strong retail sales is doing well”, Ahern said. The latest numbers suggest that Beijing will hit its target for 2015. The bureau said it had adopted the global Monetary Fund’s standards in compiling quarterly GDP data but that the change would not affect year-on-year GDP growth figures.
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“China’s economic development is adjusting to the new normal and experiencing growing pains of shifting from old drivers of growth to new ones”.
