China’s Economic Growth Picks Up in Third Quarter, Beating Expectations

Beijing: China’s economy grew 4.5 per cent year-on-year in the third quarter, beating forecasts and easing pressure on policymakers to roll out more aggressive stimulus to hit the annual growth target, official data showed on Monday.

The National Bureau of Statistics said the figure topped the 4.4 per cent forecast in a Reuters poll and improved on the 4.3 per cent recorded in April-June, which had been a more-than-three-year low. It was the fastest pace since March. On a quarterly basis, GDP grew 1.2 per cent, above the 1.1 per cent expected and up from 0.9 per cent in the second quarter. The government’s target for the year is 4.5 to 5 per cent.

September data pointed to some improvement. Industrial output rose 5.5 per cent, the quickest in six months and in line with forecasts, while retail sales grew 1.1 per cent, ahead of the 0.6 per cent expected and the strongest since March, though still weak. Growth was driven by strong exports of technology goods, with the monthly trade surplus hitting a record $133.5 billion.

Underlying weakness persisted. Fixed-asset investment fell 7.2 per cent in the first nine months, property investment dropped 20.6 per cent and infrastructure investment shrank 4.2 per cent. Analysts described a two-speed economy in which strong factory output and exports mask feeble consumption and private investment. Beijing has expanded loan interest subsidies for small private firms and consumers and drawn on an 800 billion yuan policy financing tool for infrastructure.

The export engine faces growing pressure from escalating trade tensions with the European Union. One economist expected the momentum to carry into the fourth quarter, projecting full-year growth of 4.7 per cent.