Monitor | Little evidence of reform so far from China's reformist leaders
Despite weakening activity in key sectors, the new leadership team shows little desire to implement sweeping economic liberalisation
Investors found Friday's news that China's economic growth rate accelerated in the third quarter encouraging.
Coming on top of the latest deal to raise the US debt ceiling, the release fuelled a modest rally in financial markets, with the Hang Seng Index rising 1 per cent on the day.
But financial markets take a notoriously short-term view. Try to peer a little further into the future, and if you are an optimist, the pick-up in China's growth to 7.8 per cent from 7.5 per cent in the previous quarter becomes mildly troubling. If you are a died-in-the-wool bear, it begins to look downright scary.
To bulls, the latest data looks troubling because of the weaknesses that lie behind the strong headline number. Although the overall growth rate was higher in the third quarter, September's figures revealed that activity in key sectors was weakening.
The growth rate of industrial production slowed 10.2 per cent from 10.4 per cent a month earlier. The growth of fixed-asset investment fell, too, while retail sales also grew more slowly.
Noting the pattern, many China-watchers predicted a weaker performance in the last quarter of the year.