China's economy expanded 6.7% from July to September, the same rate as in the previous two quarters, according to the government’s statistics agency.
The figures will help ensure Beijing can achieve a minimum 6.5% economic growth rate this year, reducing the need to roll out short-term stimulus measures.
Economists, however, are expecting growing headwinds for China’s economy over the coming year, with curbs imposed on the housing market and signs of weaker growth in industrial output. The growing expectation of an interest rate increase by the U.S. Federal Reserve in December has also added momentum to capital outflows out of China and poses challenges for economic policy-makers, analysts said.
Zhou Jingtong, a senior researcher at the Bank of China, said the stabilization in China’s economy came as no surprise and that it was mainly boosted by the recovering housing market, pro-growth measures implemented earlier this year and the pickup in global commodities prices.
“However, in the future, the economy is still under huge pressure with growing uncertainties in external demand, cooling measures on housing prices’ gains in major cities and the ongoing need to shut down obsolete capacity,” Zhou said.
Investment from real estate gained steam in the third quarter, while retail sales were within market expectations, according to National Bureau of Statistics data.
Industrial output figures were worse than analysts expected.
Property investment posted 5.8% growth in the first three quarters after seeing a 5.4% gain during the first eight months.
Investment from the private sector, a recent policy focus, improved, growing 2.5% in the first three quarters, up from 2.1% from January to August.
Overall investment in the economy rose 8.2% in the first three quarters, up from an 8.1% rise in the first eight months of the year. Industrial output rose 6.1% in September, down from 6.3% in August. Retail sales in September grew 10.7%, compared with 10.6% in August.
Julian Evans-Pritchard, China economist at Capital Economics, wrote in a note that the recent recovery was ultimately on borrowed time given that it had been driven in large part by faster credit growth and a property market boom, both of which policy-makers were now working to rein in. •
