Premier Li Keqiang meets heads of delegations on Oct 21 ahead of the APEC Finance Ministers’ Meeting in Beijing.[Photo by Feng Yongbin/China Daily]
China’s economic growth slowed in the third quarter to its weakest pace in five and a half years, but Premier Li Keqiang said on Oct 21 structural improvements can be seen.
The world’s second-largest economy grew by 7.3 percent from July to September from a year earlier, down from 7.5 percent in the second quarter, the National Bureau of Statistics said.
The quarterly growth rate is the slowest since the first three months of 2009, when China was hit by the global financial crisis.
GDP GROWTH[ZHANG CHENGLIANG/CHINA DAILY]
But Li said the economy has remained running within “a reasonable range” in the first three quarters of this year, with evidence of some “positive and profound changes”.
He made the remarks when meeting heads of delegations attending the APEC Finance Ministers’ Meeting, being held in Beijing on Oct 22.
Li said structural optimization has been more apparent, led by the service sector and with new industries emerging more quickly.
Administrative reforms have spurred new momentum for development, while indices for employment and energy efficiency have performed better than expected, he said.
But he added that given the complex external environment and downward pressure on the economy, it will take time for the reform measures to fully take effect.
Weak data in the past quarter emerged from the slumping property investment sector and from severe overcapacity.
“The data is slightly better than anticipated. In particular, industrial output in September grew by 8 percent, which mitigated concerns that the economy faced mounting downward pressure,” said Wang Jun, a researcher at the China Center for International Economic Exchanges.
“Judging from the current figures, the full-year target for growth of around 7.5 percent could be realized.”
Some economists believe that growth in the fourth quarter will improve.
“The government has reiterated that no broad stimulus measures will be implemented, and I think today’s data will further bolster and strengthen that trend,” said Zhu Haibin, chief China economist at JPMorgan Chase & Co.
Tang Jianwei, an economist at the Bank of Communications, said, “Exports and consumption are likely to remain stable, while investment will probably stabilize. Given a favorable comparison base of last year, fourth-quarter growth could pick up slightly to 7.4 percent.”
Sheng Laiyun, spokesman for the National Bureau of Statistics, said at a news conference that the chances of the economy continuing to run at a “steadily fast” pace are very high.
“Inflation and employment are generally stable. Although growth has eased, the economy is still functioning within a reasonable range,” Sheng said.
However, Tom Orlik, North Asia economist at Bloomberg, said: “I’d be quite surprised if fourth-quarter growth is stronger. Headwinds to the economy persist, especially from the downturn in the real estate sector and the government’s measures to tackle overcapacity in industry.
“The current double-digit growth rates in exports look tough to sustain, given fragile global growth. That suggests growth could continue to edge down,” he said.
But Orlik believes that the message from this year is that “China does not need super-charged GDP growth in order to deliver low unemployment and rising incomes.”
Analysts have said the economy has been more resilient in creating jobs and generating income, despite slow growth.
In the first nine months of the year, more than 10 million jobs were added in urban areas, meaning the full year’s employment target has been fulfilled ahead of time, the statistics bureau said.
Given these facts, the government has few reasons to unveil aggressive measures, analysts said.
Sheng pointed to optimistic signs of rebalancing. Consumption contributed 48.5 percent to GDP growth in the first three quarters, up from 45.9 percent in the same period last year.