Forex News – China’s economy humming along at 7.8% in Q3
October 18, 2013 11:48 am
As the world’s second largest economy and – despite the relative slowdown – one of the fastest-growing economies in the world, China is very important for the world economy and the pace of world economic growth.
China is also one of the few countries that announce quarterly growth figures so soon after the end of each quarter.
Chinese GDP for the third quarter grew 7.8% compared to a year earlier, accelerating from the second quarter’s growth rate of 7.5%. For the first 9 months of the year the growth rate was at 7.7% compared to the respective year-ago period.
The figures were in line with expectations and they confirmed that the Chinese leadership’s goal of 7.5% growth for 2013 is well on course to be met and even to be slightly exceeded.
What was particularly interesting was the composition of economic growth. The economy received a strong boost from investment, particularly fixed asset investment and even more specifically government-funded infrastructure construction projects.
Therefore the construction and real estate complex of activities such as infrastructure, housing and property sectors played a major role of providing the most significant chunk of growth.
The surprise was that exports actually subtracted slightly from growth due to the weak state of the global economy and various emerging markets.
The government is also trying to shift the economy’s focus away from exports and investment and towards consumption. However, the economic boost provided by consumption was overshadowed by the boost from investment.
In other statistics released from the Chinese National Bureau of Statistics together with GDP, industrial output for September grew by 10.2% on an annual basis while retail sales grew by 13.3%. Both figures were roughly in line with estimates.
In conclusion, the latest data from China confirm that the country is on a steady economic course, although quite a few challenges also lie ahead for the world’s most populous economy.
A further slowdown looks probable in the future, but in the short-term – at least the next couple of quarters – it should continue to provide much-needed support to a slow-growing global economy.
As the world’s second largest economy and – despite the relative slowdown – one of the fastest-growing economies in the world, China is very important for the world economy and the pace of world economic growth.
China is also one of the few countries that announce quarterly growth figures so soon after the end of each quarter.
Chinese GDP for the third quarter grew 7.8% compared to a year earlier, accelerating from the second quarter’s growth rate of 7.5%. For the first 9 months of the year the growth rate was at 7.7% compared to the respective year-ago period.
The figures were in line with expectations and they confirmed that the Chinese leadership’s goal of 7.5% growth for 2013 is well on course to be met and even to be slightly exceeded.
What was particularly interesting was the composition of economic growth. The economy received a strong boost from investment, particularly fixed asset investment and even more specifically government-funded infrastructure construction projects.
Therefore the construction and real estate complex of activities such as infrastructure, housing and property sectors played a major role of providing the most significant chunk of growth.
The surprise was that exports actually subtracted slightly from growth due to the weak state of the global economy and various emerging markets.
The government is also trying to shift the economy’s focus away from exports and investment and towards consumption. However, the economic boost provided by consumption was overshadowed by the boost from investment.
In other statistics released from the Chinese National Bureau of Statistics together with GDP, industrial output for September grew by 10.2% on an annual basis while retail sales grew by 13.3%. Both figures were roughly in line with estimates.
In conclusion, the latest data from China confirm that the country is on a steady economic course, although quite a few challenges also lie ahead for the world’s most populous economy.
A further slowdown looks probable in the future, but in the short-term – at least the next couple of quarters – it should continue to provide much-needed support to a slow-growing global economy.
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