China posts strong figures as Xi tries to play down growth rate
Economy expands 6.8 per cent in third quarter, well above annual target
China’s US$12 trillion economy expanded 6.8 per cent in the third quarter, a rate that comfortably puts China as one of the fastest growing major economies in the world.
The figures come as President Xi Jinping has promoted quality over the quantity of economic growth.
The rate marked a slight deceleration from the 6.9 per cent growth posted in the second quarter, but is far above the annual growth target of 6.5 per cent for this year. It could also help China to beat India in terms of headline growth rate for 2017.
China “is accumulating more favourable factors that can support long-term strong growth”, the government statistics bureau said in a statement.
Xi wants to reduce the emphasis on the speed of growth to shift the focus to more sustainable and efficient economic development. In his marathon speech on Wednesday, Xi did not mention a growth target for the world’s second biggest economy.
Sun Shen, party secretary of Qiqihar in northeastern Heilongjiang province, told the South China Morning Post on the sidelines of the party congress on Thursday that growth quality, instead of a headline figure, was increasingly important for local governments.
“In our real work, the rate of GDP is not that important – we are required to make quality and efficiency the top priority,” Sun said.
The municipality under Sun’s management is one of the poorer regions of China. According to official data, it reported economic growth of 6.1 per cent in 2016, below the national average.
A growth rate that was closer to 7 per cent than 6 per cent would offer Xi greater leeway to tackle structural problems in the economy during his next five-year term, analysts said.
China’s growth has shown strong resilience with its headline rate moving in a narrow range of 6.7 per cent to 6.9 per cent for nine consecutive quarters.
“China’s growth has proved much more resilient than previously thought,” Liu Dongliang, an analyst with China Merchants Bank, wrote in a note about Thursday’s economic data. “It’s unlikely China’s growth will fall off a cliff.”
Fears that China is headed for an economic hard landing or a full-blown financial crisis gained traction last year amid concerns over debt levels, but have waned in 2017 since Beijing started taking a stronger role supervising the economy. In response, the International Monetary Fund has revised up its outlook for China four times so far this year.
The IMF raised China’s growth forecast to 6.8 per cent for 2017 in its latest revision earlier this month while it lowered India’s growth projection to 6.7 per cent.
The statistics bureau said in a statement on Thursday that China’s industrial output in September rose 6.6 per cent from a year earlier, while retail sales rose 10.3 per cent last month.
The country’s fixed-asset investment expanded 7.5 per cent in the first nine months of the year. Property investment rose 8.1 per cent, a particularly strong reading.
Xi said in his speech at the opening of the Communist Party congress in Beijing on Wednesday that China’s annual economic output would top 80 trillion yuan (US$12 trillion) this year from 54 trillion yuan five years ago.
In the first three quarters of this year, China’s economic output was 59.3 trillion yuan, the statistics agency said.