China’s economy grew 6.9% in the third quarter, the weakest rate since the global financial crisis.
Advertisement
The government has set its annual economic growth target at “around 7 percent” for 2015, but at the Chinese Premier Li Keqiang admitted over the weekend that the global economic recovery was losing steam and that hitting such a target was “not easy”.
The Shanghai Composite Index was lower on the news, but although it was the worst growth for six years it still beat analyst expectations of 6.8% annualised growth.
The latest growth figure comes after a slew of disappointing data out of China.
Earlier manufacturing data had suggested that the sector would continue to contract in September. The retail sales report is a closely watched figure by traders and investors on the street as it provides an insight into the domestic consumption trajectory in the world’s second largest economy.
But despite a slowdown in the industrial sector, Mr Sheng said the services sector is expected to grow rapidly. After two years of tightening credit conditions, regulators loosened access to credit in the summer and devalued the currency, though the move was only muted after it sent shockwaves across global markets.
China’s economic growth is still not reflecting any optimistic notes. Since 2010 it has slowed. The growth rate forecast for the USA however stands at 3.1%.
“Some investors were caught on the wrong side with the Chinese data and there is a few broad short covering but the in-line data means that we are unlikely to get any immediate stimulus being announced so markets are likely to trade sideways”, said a trader at a U.S. bank in Hong Kong.
“As a whole, the good momentum of steady growth did not change in spite of the slight slowdown in the third quarter of 2015”, it said.
“Flaws with how the GDP deflator is calculated, along with political pressure to meet growth targets that have become increasingly at risk, have meant that official growth rates have not slowed almost as quickly as most third party measures of growth in recent years”.
Advertisement
Louis Kuijs, one of the forecaster’s economists, said: “Continued downward pressures from real estate and exports caused GDP growth to drop”.
