China economic growth steady despite weak export figures
October 19, 2016
China's economic growth was steady in the three months to September according to the latest data confirmed by the National Bureau of Statistics (NBS) on Wednesday.
Compared with a year earlier, figures showed the world's second-largest economy grew by 6.7 percent, which was in line with the previous two quarters and marginally better than some analysts had predicted.
Julian Evans-Pritchard, China economist at Capital Economics said: "Economic activity seems to be holding up reasonably well, with few signs that a renewed slowdown is just around the corner."
Forecasters remained cautious however, warning that growth was still likely to slow next year given that this latest strong showing was reliant on a surge in bank lending and real estate prices. Regulators are trying to rein in growth in these areas, viewing them as risky.
Initial reaction to the news was somewhat muted, with Shanghai stocks rising by 0.2 percent while Hong Kong gave up its initial gains.
Stimulus offsets weak exports
The data confirmed that the Chinese economy is stabilizing off the back of Beijing's stimulus measures, as well as increased bank lending and a hot property market.
As the country's communist leaders try to steer China towards more self-sustaining growth, based on consumer spending rather than trade and investment, Beijing has focused investment in major public works and construction projects.
"Third-quarter data signaled that economic growth has stabilized at a healthy pace, and that China's transition from a high-speed, heavy industry-based economy to a moderately-fast consumer and services-based economy is well underway," said Andy Rothman of Matthews Asia in a report.
Retail sectors, especially e-commerce, have showed particularly promising signs of growth this year, with retail sales up 10.4 percent in the first three quarters.
Stubbornly weak export data, worries about debt and subdued private investment will likely keep some investors cautious.
"As the boost from policy stimulus begins to wear off, probably at some point early next year, continued structural drags mean the economy is set to begin slowing again," according to Evans-Pritchard.
tm/jm (AP, AFP, Reuters)