China GDP: economic recovery regains momentum in third quarter, edges closer to annual target

China’s economic recovery regained mild momentum in the third quarter, rising by 1.3 per cent from the previous three months, amid ongoing calls for increased policy support to sustain a consistent growth trajectory.

Year on year, China’s gross domestic product grew by 4.9 per cent in the third quarter, the National Bureau of Statistics (NBS) said on Wednesday.

The year-on-year figure was higher than the average economist’s estimate of a 4.5 per cent rise, as surveyed by Chinese data provider Wind.

Beijing has set an annual growth target of around 5 per cent, and China’s economy grew by 5.2 per cent in the first three quarters of the 2023, year on year.

“We’ll focus on boosting effective domestic demand, invigorating market entities and implementing already released policies … to accomplish this year’s social and economic development goals,” said NBS deputy director Sheng Laiyun on Wednesday.

He added that, due to the low comparison base last year, China only needs year-on-year growth of 4.4 per cent in the fourth quarter to achieve the full-year target.

The subdued property market remained a drag on China’s economy, as real estate investment – which accounts for about 20 to 30 per cent of the total investment – falling by 9.1 per cent in the first three quarters compared with a year earlier, contracting further from the 8.8 per cent drop in the first eight months of the year.

Elsewhere, fixed-asset investment – a major growth engine – expanded by 3.1 per cent in the first nine months of the year, compared with the same period last year, down from the 3.2 growth per cent in the first eight months of the year.

Retail sales, a major gauge for spending sentiment, grew by 5.5 per cent in September, compared with 4.6 per cent growth in August, and higher the 4.9 per cent growth predicted by Wind.

Industrial output, meanwhile, rose by 4.5 per cent in September, unchanged from August, but lower than the 4.6 per cent growth predicted by Wind.

The overall surveyed urban jobless rate stood at 5 per cent in September, down from 5.2 per cent in August.

“China’s economic recovery continued in September, driven by better than expected retails sales,” said Zhang Zhiwei, president and chief economist at Pinpoint Asset Management, adding that the government was less likely to launch stimulus in the following months as the growth target is set to be achieved.

“The focus of the government and the market will shift to the growth outlook for next year. The key issue is what growth target the government will set and how much fiscal easing will take place.”

But despite improvements in recent economic indicators, the rebound would not be easy, said Anbound, an independent think tank.

“China’s economy is an extra-long heavily loaded train. Affected by various factors at home and abroad, a slowdown trend has emerged,” it said in a report published on Monday.

“Due to the massive size of China’s economy, this deceleration process shows strong inertia. Once the slowdown begins, it will be difficult to use policies to stop the slowdown.”

Additional reporting by Frank Chen