China powers ahead, posts 7.8% growth in Q3
BEIJING, China - China's gross domestic product expanded 7.8% year-on-year in July-September, the government said Friday, October 18, snapping two quarters of slowing growth in the world's second-largest economy.
The figure matched the median forecast in a survey of 11 economists by AFP. Growth for the first 9 months of the year came in at 7.7%, the National Bureau of Statistics said.
"The overall national economy realized 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 favor of promoting economic restructuring and pushing forward reforms." (READ: China growth slows to 7.5% in Q2)
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%. The government usually announces a conservative number that it regularly surpasses.
Industrial production, which measures output at factories, workshops and mines, rose 10.2% in September year-on-year, the NBS said, while retail sales, a key indicator for consumer spending, was up 13.3%.
And fixed asset investment, a measure of government spending on infrastructure, rose 20.2% during the first 9 months of 2013.
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% expansion for all of 2012 — the worst performance since 1999.
The economy expanded 2.2% in the 3rd quarter from the previous 3 months, the NBS said, the strongest expansion by that measure in 5 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 stabilization and expansion of China's exports," he added.
Despite the overall acceleration in the 3rd quarter, signs the recovery is waning have already emerged, highlighted by a surprising drop in exports in September.
"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 4th quarter may be lower than the 3rd quarter, as the momentum of the rebound is not that strong while the base from the 4th 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. (READ: China credit squeeze raises worry over economy)
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. - Rappler.com