Analysing the pronouncements of mainland policymakers is both an art and a science and takes time. Rather than helping to explain Tuesday's surprise decision by the People's Bank of China (PBOC) to tighten rates - its first such since 2007 - the latest economic data for the third quarter seems to raise more questions.
The 25-basis-point rise in benchmark rates surprised many, as the PBOC had earlier signalled that rates would remain stable.
PBOC governor Zhou Xiaochuan earlier this month said in Washington that the central bank would use quantitative measures rather than rates to curb inflation.
As a result, the surprise tightening prompted economists to speculate that growth and inflation would be stronger than expected, and the tightening could have been a pre-emptive act ahead of the release of third-quarter data on Thursday.
Investors around the world have been monitoring mainland macroeconomic data for the third quarter because any unexpected rise in inflation, gross domestic product, industrial production or retail sales in the world's second-largest economy would have global implications.
The latest GDP data showed economic growth continued to slow in the third quarter, easing to 9.6 per cent year on year, the slowest this year. It grew 11.9 per cent year on year in the first quarter, and 10.3 per cent in the June quarter. There was also a sharp decline in the mainland's industrial growth, which rose 13.5 per cent in the September quarter, down from 19.6 per cent in the March quarter.
Although the rise in inflation in September was the highest in 23 months, the 3.6 per cent year-on-year gain was just 0.1 percentage point higher than the year-on-year growth in August and much slower than market had expected. For the nine months to September, the consumer price index rose 2.9 per cent, still below the government's target of 3 per cent inflation for this year.
