China’s National Bureau of Statistics reported a third-quarter GDP growth of 4.6 percent year-on-year, slightly surpassing the 4.5 percent expected by economists surveyed by Reuters. This growth is less than the second-quarter rate of 4.7 percent year-on-year. On a quarterly basis, the third quarter experienced a 0.9 percent expansion, up from 0.7 percent in the second quarter.
China implemented a range of stimulus measures in late September, including interest rate cuts and support for the property and equity markets, to stabilise the economy. Investors now anticipate that Chinese lawmakers will approve additional budget or debt sales to finance public spending in an upcoming meeting, following promises of fiscal support from authorities.
Key Indicators
Other key indicators revealed a broad improvement across various sectors of the economy in September. Industrial production increased by 5.4 percent year-on-year, surpassing economists’ forecast of 4.6 percent growth.
Retail sales rose by 3.2 percent, exceeding the projected gain of 2.5 percent. Fixed-asset investment grew by 3.4 percent in the first nine months, compared to the anticipated 3.3 percent increase.
However, the property sector continued to contract, with investment plunging by 10.1 percent during the same period. Additionally, the urban unemployment rate decreased to 5.1 percent, down from 5.3 percent in August.
Regulatory Insights
“The national economy showed positive signs of growth in September,” Sheng Laiyun, the bureau’s deputy commissioner, stated at the press conference, according to CNBC’s translation of the Chinese. “The confidence is building up to hit the full-year growth target of around 5 percent.”
Other data released on Friday, including retail sales and industrial production, also exceeded expectations, providing a hopeful outlook for the world’s second-largest economy.
Beijing has encountered increasing public scrutiny regarding its ability to meet its own annual growth target of “around 5 percent.”
“Since real GDP expanded by 4.8 percent in the first three quarters of the year, the full year GDP growth target of around 5 percent is now within reach with extra stimulus in Q4,” said Tianchen Xu, senior economist at The Economist Intelligence Unit.
“Despite the multitude of challenges, China’s economy is not incurable as some would suggest,” Xu added. “There’s reason to be more optimistic about growth in the coming years, given how the government is committed to shoring up the economy.”
Stock Market Movement
The share price of the Shanghai Stock Exchange Composite Index increased by 3 percent on Friday, reaching a high of ¥3,262.51 (Chinese Yuan), up from its previous close of ¥3,169.38.
The stock market has experienced significant fluctuations, with the benchmark CSI 300 Index rising to its highest level since July 2022 in early October, before declining by approximately 10 percent since that peak.
Written by – Siddesh S Raskar
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