Chinese Q3 GDP is out, and as it has done in three of the past four GDP reports, it’s beaten expectations by 0.1%.
In annualised terms the economy grew by 6.9%, ahead of expectations for growth of 6.8%. The figure was slightly below the 7.0% growth rate reported in the June quarter. Despite the small beat, the annual growth rate was the slowest recorded since Q1 2009.
According to the preliminary estimate from China’s national bureau of statistics (NBS), value added growth of the primary industry was 3,919.5 billion yuan, up 3.8% year-on-year, while that for secondary industry was 19,779.9 billion yuan, an increase of 6.0%. Growth in the nation’s tertiary industry, the largest component of all three, was 25,077.9 billion yuan, up by 8.4%.
From a quarterly perspective, GDP increased by 1.8%, ahead of expectations for growth of 1.7%.
“In the first three quarters of 2015, as the recovery of the world economy was weaker than expected, China was facing increasing downward pressure of domestic economic development,” said the NBS.
“Under the tough situation, the Central Party Committee and the State Council took full consideration of domestic and global situations, adopted scientific measures to stabilize economic growth, promote reforms, enhance restructuring, benefit people and control risks, implemented effective range-based, targeted and discretionary macro regulation, further deepened the reform and opening up, encouraged mass entrepreneurship and innovation and increased supply of public goods and services. As a result, the overall performance of national economy was stable and moving in a positive direction.”
While the GDP growth rate came in ahead of expectations, monthly data released for September – with the exception of retail sales – undershot badly to the downside.
Industrial production grew by just 5.7% from September 2014, a figure well below the 6.1% pace seen in August and expectations for a moderation to 6.0%. Urban fixed asset investment, essentially infrastructure investment, also tanked compared to its previously lofty standards, increasing by just 10.3% over the past 12 months. The reading, down from 10.9% in August, was well below market expectations for growth of 10.8% and marked the slowest annual expansion seen since June 2000.
While the monthly readings on infrastructure and industry missed, fitting with the economic rebalancing currently underway in China, retail sales grew by 10.9%, topping the 10.8% level expected.
The market reaction to the data has been mildly positive, perhaps reflective of the view that despite the GDP beat, weakness in the monthly data may see further monetary and fiscal stimulus arrive in the months ahead, further underpinning growth.
Stocks have moved higher, or have come off their intrasession lows, while the Australian dollar, a proxy for sentiment towards China, is currently trading up 0.17% against its US namesake at .7269.
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