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China growth slows marginally

October 19, 2017

Expansion of the world's second-largest economy has cooled slightly, fresh figures from the national statistics office have shown. But there's no sign of instability as the Communist Party Congress is in full swing.

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Chinese worker
Image: Reuters

China's economy grew by 6.8 percent in the third quarter, the National Bureau of Statistics reported Thursday, cooling a bit from the 6.9 percent growth rate in the first six months of the year.

Beijing has been trying to project stability around the twice-a-decade Communist Party Congress during which the political elite chooses the country's future leadership and defines the nation's economic course.

"The national economy has maintained the momentum of stable and sound development, with favorable factors accumulating for the economy to maintain medium-high rates of growth," stats office spokesman Xing Zhihong said in a statement.

Waiting for reforms

Growth in the third quarter was supported by strong retail sales and exports, but experts warned that China's soaring debt posed financial risks and could impact economic expansion.

China's economic challenges

The government had promised to deleverage the economy, but has instead used debt to support the construction sector and underperforming state-owned enterprises.

Nonetheless, analysts see the nation embarking on structural reforms. "Relatively strong economic performance this year offers a good opportunity for the government to address several long-term issues," said Australia & New Zealand Banking Group economist Raymond Yeung.

Beijing has for years been trying to transition the economy from one reliant on exports to domestic consumption.

Thursday's figures suggest that the policy is paying off. Brisk consumer spending and strong factory output were indeed the main drivers behind growth in the July-to-September period, while retail sales rose by 10.4 percent in the first nine months of the year.

hg/jd (dpa, AFP)