China GDP growth: A slower or sustainable pace?

CHINA’S economy growth slowed slightly as expected in the third quarter (3Q).

It was slightly lower than 2Q’s 6.9 per cent expansion.

According to the National Bureau of Statistics, the economy grew 6.8 per cent in 3Q compared with the same period last year.

The modest drop of the 3Q GDP might due to the government’s effort to rein the property market and temper down debt risks activities in the world’s secondlargest economy.

As more cities try to cool surging housing prices by slowing down property investments and constructions, a government campaign against riskier lending pushed up borrowing costs.

In the same statistic released last week, China’s GDP in 3Q grew 1.7 per cent on a quarteron-quarter (q-o-q) basis, as expected, compared with growth of 1.8 per cent in April to June, which was revised up from the initially reported 1.7 per cent growth.

The statistic painted a steady but positive economic development for China in the first three quarters of the year.

It also highlighted challenges in a complex international environment amid domestic structural changes.

China’s import and export growth also accelerated in September, suggesting the economy is still expanding at a healthy pace.

China’s banks extended more loans than expected last month, buoyed by demand from home buyers and companies.

The People’s Bank of China (PBoC) governor, Zhou Xiaochuan, said China is likely to post growth of seven per cent in the second half of 2017 (2H17) thanks to rapid household spending.

The 1H GDP growth was 6.9 per cent.

This was a more optimistic growth than the target China had set earlier this year when Premier Li Keqiang said the country was aiming to expand its economy by around 6.5 per cent in 2017.

China’s president, Xi Jinping said that the world’s second-largest economy will move from highspeed to high-quality growth as it pushes ahead with reforms.

Looking forward, we see China’s economy will continue its ‘managed deceleration’ in 2018 as their policymakers try to achieve a more sustainable growth trajectory.