In the past week, China has introduced a series of measures aimed at stimulating its economy prior to a significant Politburo meeting, which will focus on assessing the performance of the world’s second-largest economy in the first half of the year.
On Friday, China’s National Bureau of Statistics reported a year-on-year GDP growth of 4.6% for the third quarter, slightly surpassing the 4.5% anticipated by economists surveyed by Reuters. This figure was lower than the 4.7% growth recorded in the second quarter. On a quarterly basis, the economy expanded by 0.9% in the third quarter, compared to 0.7% in the previous quarter.
Sheng Laiyun, the deputy commissioner of the bureau, stated at a press conference, as translated by CNBC, that the national economy showed positive growth signs in September. He expressed confidence in achieving the full-year growth target of around 5%.
Additional data released Friday, including retail sales and industrial production figures, also exceeded expectations, presenting a positive outlook for China’s economy. Beijing has been increasingly scrutinized regarding its capacity to reach its annual growth target of “around 5%.”
According to Tianchen Xu, senior economist at The Economist Intelligence Unit, real GDP growth of 4.8% in the first three quarters makes the full-year target attainable with additional stimulus in the fourth quarter. Xu also noted that despite various challenges, China’s economy is not as problematic as some may suggest, highlighting the government’s commitment to strengthening economic growth.
Following the release of several disappointing economic indicators, Chinese officials announced last month a series of support measures to revitalize the sluggish economy, which included reducing the required reserve ratio for banks by 50 basis points. Throughout the current month, authorities have continued to introduce further stimulus measures amid low consumer sentiment and a struggling property sector. Over the weekend, China’s Finance Minister, Lan Fo’an, informed reporters that the central government is prepared to increase debt and the deficit, though no details were provided about the size of the prospective package.
The release of Friday’s data saw Mainland China’s CSI 300 trading 0.7% higher and Hong Kong’s Hang Seng index rising by 1.3%. Bruce Pang, chief economist and head of research for Greater China at JLL, commented that the economic performance aligns with market expectations, considering the weak domestic demand, a still-recovering housing market, and slowing export growth.
