China economy slows, rebound expected in Q4
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E-mail Xinhua, October 18, 2012
China's economy has slowed for the seventh straight quarter, growing 7.4 percent year-on-year in the third quarter of 2012, the National Bureau of Statistics (NBS) announced Thursday.
The figure was lower than the 7.6-percent growth seen in the second quarter and the first quarter's 8.1-percent growth but was still in line with economists' predictions that third-quarter economic output would grow between 7.4 and 7.5 percent.
China's GDP reached 35.35 trillion yuan (5.61 trillion U.S. dollars) in the first three quarters, NBS spokesman Sheng Laiyun said at a press conference.
"The GDP grew 7.7 percent in the first three quarters and the economy is generally stable," Sheng said.
During the first half, the GDP grew by 7.8 percent.
"Compared with the first half, we have seen some improvements in the third quarter," he said, citing a trade rebound and other major economic indicators showing that growth has picked up.
NBS data released Thursday showed that total retail sales in September hit 1.82 trillion yuan, up 14.2 percent year on year, with a month-on-month growth rate of 1.46 percentage points.
Industrial value-added output grew 9.2 percent in September, up 0.3 percentage points compared to August.
Fixed asset investment rose 20.5 percent year-on-year to 25.69 trillion yuan in the first nine months, with growth accelerating slightly by 0.1 percentage point from the first half.
"We are fully confident that the economy will meet its growth target of 7.5 percent this year," Sheng said.
China lowered its growth target for 2012 to 7.5 percent amid sluggish demand and global economic woes.
"We are seeing positive factors that will drive a rebound for the economy," said Tang Jianwei, senior finance analyst at the Bank of Communications, China's fifth-largest lender.
China's exports saw a surprise surge in September, rising 9.9 percent to 186.35 billion U.S. dollars. Export growth sharply increased from 2.7 percent in August, according to customs data. Imports grew 2.4 percent to 158.68 billion U.S. dollars, ending three months of consecutive drops.
Tang predicted that exports will continue recovering in the fourth quarter on improvements in the EU and U.S. economies following a new round of quantitative easing (QE3) in the United States and the launch of a permanent bailout fund, the European Stability Mechanism, in the eurozone that aims for financial stability in the region.
Tang said a rise in people's disposable incomes and a stable employment situation further paved the way for recovery, which will be boosted by more consumption and a faster pace of investment following an upcoming leadership transition.
NBS data showed that China created 10.24 million new jobs in the first quarter, exceeding the annual target of ten million. During the same period, the disposable incomes of urban residents rose 9.8 percent, while those of rural residents grew 12.3 percent.
Tang predicted that the GDP will rise 7.8 percent this year based on the nation's growth-stabilizing efforts.
"We are maintaining a 7.7-percent growth forecast for the year and a similar forecast for 2013," said Alaistair Chan, an economist at Moody's Analytics.
The country has made stabilizing growth a top priority this year amid the economy's downward pressure. The government has expedited export tax rebates for enterprises as a way to stabilize trade. It has also approved a raft of investment projects to shore up growth.
The central bank has twice cut the reserve requirement ratio for banks and lowered benchmark interest rates this year.
During recent talks on China's economic condition, Premier Wen Jiabao said China's economic growth has started to stabilize and witnessed positive changes.
However, Wen said that the foundation for a stabilized economy is not solid enough due to significant drops in corporate profits and fiscal revenue growth.
China's inflation eased to 1.9 percent in September from 2 percent in August. Despite the lessened pressure, Sheng said the country should continue to be wary, warning of imported inflation likely to be caused by QE3 and loose monetary policies in the yen and euro regions.
Sheng Laiyun said that the nation will continue to prioritize growth-stabilizing efforts while pushing forward economic restructuring and industrial upgrading.
The NBS's preliminary data showed that the tertiary industry grew 7.9 percent to 15.5 trillion yuan in the first three quarters, accounting for 43.8 percent of the GDP, up 1.2 percentage points from one year ago.
Zhuang Jian, an economist at the Asian Development Bank, said cost-effectiveness will improve if growth is increasingly powered by restructuring, the healthy development of small- and micro-sided companies and more private investment.
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