China’s economy expanded 7.8 per cent year-on-year in July-September, data showed Friday, snapping two quarters of slowing growth, but analysts questioned whether the improvement was sustainable.
The gross domestic product (GDP) 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.”
But its spokesman Sheng Laiyun warned of “pressures” in the form of a “complicated, volatile and severe” external environment, and accumulated structural problems in the economy.
Additionally, high comparative figures in the last three months of 2012 could mean China’s growth rate may not accelerate in the fourth quarter, he added.
The latest 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.
But analysts are questioning whether such measures can be continued, and some signs the recovery is waning have already emerged, highlighted by a surprising drop in exports last month.
“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,” Ma Xiaoping, a Beijing-based economist for British bank HSBC, told AFP.
Room for further monetary loosening is limited due to factors including rising inflation and excess market liquidity, economists say, adding that at the same time skyrocketing local government debt and slowing fiscal revenue growth are restricting further tax incentives.
ANZ bank economists Liu Li-Gang and Zhou Hao credited what they called the “mini stimulus” package for the growth uptick.
The government will more than make good on its 7.5 per cent growth target, they predicted, with “risk biased to the upside”, but added that the rebound was “not on a solid footing”.
There were few indications that inventories are being restocked, they said, a situation “reflecting a cautious mood” ahead of a key Communist Party meeting scheduled for November, when economic reforms could be announced.
The pump-priming 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.
Sheng said: “Despite the growth rate volatility, the internal structure of the economy and the growth quality have improved.
“Looking forward, it is more likely that the Chinese economy will maintain steady and relatively fast growth.”
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