Macquarie Research says China's hard industrial data suggests the country's economic fundamentals remains "fragile," as seen by railway freight declining 15 per cent in August and container throughput growing by only 2.9 per cent in September. Growth in the industrial sector slowed to 5.8 per cent year on year in the third quarter and while the service sector expanded 8.6 per cent, the situation is "a reflection of the bumpy rebalancing process underlying the Chinese economy." Macquarie added that it was optimistic a slowdown in the third quarter would be followed by a modest improvement in the fourth quarter of this year on policy easing and better property investment. Policy makers might lower next year's GDP target to 6.5 per cent, it said.