China’s gross domestic product expanded 7.8 per cent year-on-year in July-September, the government says, snapping two quarters of slowing growth in the world’s second-largest economy.
Friday’s figure matched the median forecast in a survey of 11 economists by AFP. Growth for the first nine months of the year came in at 7.7 per cent, the National Bureau of Statistics said.
“The overall national economy realised steady growth and enjoyed good momentum,” the NBS said in a statement accompanying the figures.
“The major indicators stayed within the rational range, which was in favour of promoting economic restructuring and pushing forward reforms.”
The result suggests China’s economy, a key driver of global growth, remains on track to at least meet Beijing’s own target for this year of 7.5 per cent. The government usually announces a conservative number that it regularly surpasses.
Industrial production, which measures output at factories, workshops and mines, rose 10.2 per cent in September year-on-year, the NBS said, while retail sales, a key indicator for consumer spending, was up 13.3 per cent.
And fixed asset investment, a measure of government spending on infrastructure, rose 20.2 per cent during the first nine months of the year.
The latest report card for the economy comes as China’s new leadership has stressed the need to retool the country’s growth model to one where private, consumer-led demand drives sustained – albeit lower – expansion.
Economists surveyed ahead of the release had said the jump was mainly a result of government stimulus since late June that featured increased rail and urban fixed-asset investment, tax cuts and looser monetary policy.
The measures were taken after economic growth slowed for two straight quarters and following a 7.7 per cent expansion for all of 2012 – the worst performance since 1999.
The economy expanded 2.2 per cent in the third quarter from the previous three months, the NBS said, the strongest expansion by that measure in five quarters.
“Despite the growth rate volatility, the internal structure of the economy and the growth quality have improved,” NBS spokesman Sheng Laiyun told reporters Friday.
“Many developed economies ended recession in the second quarter and started recovering slowly, which (had a) positive impact for the stabilisation and expansion of China’s exports,” he added.
Despite the overall acceleration in the third quarter, signs the recovery is waning have already emerged, highlighted by a surprising drop in exports last month.
“The margin of the rebound may not be that big, but still it showed momentum of a mild and steady rebound, Ma Xiaoping, a Beijing-based economist for HSBC, told AFP.
“The GDP figure in the fourth quarter may be lower than the third quarter, as the momentum of the rebound is not that strong while the base from the fourth quarter last year is relatively high,” she added.
Room for further monetary loosening is limited due to factors including rising inflation and excess market liquidity, analysts said.
At the same time skyrocketing local government debt and slowing fiscal revenue growth are restricting further tax incentives, economists say.
China’s new leaders have so far avoided taking aggressive pump-priming measures similar to those seen in response to the global financial crisis.
