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At a time when the U.S. economic recovery looks weak and the eurozone crisis shows no signs of letting up China is still seen as an engine of growth. But many have been calling for a hard landing.So, markets will be watching anxiously as China releases its third quarter GDP data at 10 p.m. ET.
China will at the same time release industrial production, retail sales and fixed asset investment figures for September. Here’s what to expect:
Bank of America’s Ting Lu expects third quarter GDP to rise 7.4 per cent. This is down from 7.6 per cent in the second quarter. From Lu:
“The room for further slowdown is now quite limited We believe growth in China could bottom in 3Q12, though it might take another couple of quarters for growth to truly bottom out. In other words, the shape of this cycle might be more U-shaped than V-shaped, and to some extent might look “W- shaped” as there could be some small volatility at the bottom.”
Economists polled by Bloomberg expect GDP to climb 7.4 per cent on the year, and 2 per cent on the quarter. Year-to-date GDP is expected to rise 7.7 per cent.
Fixed Asset Investment (FAI)
Lu expects FAI, an all important measure of capital spending, to rise 19.5 per cent year-over-year (YoY) and year-to-date FAI to rise 20.2 per cent in September. This compares with 19.1 per cent and 20.2 per cent respectively in August.
Economists polled by Bloomberg expect year-to-date FAI growth to rise 20.2 per cent.
Lu projects that industrial production will be up 9 per cent in September, from 8.9 per cent the previous month.
Economists polled by Bloomberg expect industrial production to rise 9 per cent in September, and year-to-date industrial production to rise 10 per cent.
Retail sales are expected to be up 13.2 per cent in September, according to Lu. He writes that slower economic growth could put off discretionary purchases but the pick up in home sales could have driven sales of home appliances and construction materials.
Economists polled by Bloomberg expect retail sales to rise 13.2 per cent YoY in September, and year-to-date retail sales to climb 14 per cent YoY.