China has announced a series of measures over the past week aimed at boosting the economy ahead of a key Politburo meeting later this week that will focus on reviewing the first-half performance of the world’s second-largest economy.
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China’s National Bureau of Statistics reported on Friday that third-quarter GDP grew at an annual rate of 4.6%, slightly higher than the 4.5% expected by economists polled by Reuters.
This was lower than the 4.7% annual growth rate in the second quarter. On a quarterly basis, growth was 0.9% in the third quarter and 0.7% in the second quarter.
“The national economy showed signs of positive growth in September,” Sheng Laiyun, deputy director of the National Bureau of Statistics, said at a press conference, according to CNBC’s Chinese translation.
Other data on Friday, including retail sales and industrial production, also beat expectations, a hopeful sign for the world’s second-largest economy.
Beijing faces growing public scrutiny over its ability to meet its annual growth target of “around 5%.”
Xu Tianchen, senior economist at the Economist Intelligence Unit, said, “With real GDP growth of 4.8% in the first three quarters of this year, and through additional stimulus in the fourth quarter, the full-year GDP growth target of around 5% can already be achieved.”
“Despite facing many challenges, China’s economy is not as hopeless as some people say,” Xu added. “Given the government’s commitment to boosting the economy, there is reason to be more optimistic about growth in the coming years.”
After releasing a series of disappointing economic data, Chinese officials last month announced a series of support measures to boost the flagging economy, including cutting the amount of cash required by banks by 50 basis points.
Authorities have continued to roll out more stimulus measures this month amid sluggish consumer confidence and a sluggish real estate sector. Over the weekend, Chinese Finance Minister Lan Fo’an told reporters that the central government had room to increase debt and deficits, but did not disclose the specific scale of the plan.
In the latest round of financing, China’s Ministry of Housing and Urban-Rural Development announced on Thursday that it would expand a “white list” of real estate projects and speed up bank lending for these unfinished development projects, increasing the loan size to 4 trillion yuan by the end of the year. ($561.8 billion).
Mainland China’s CSI 300 index rose 0.7% and Hong Kong’s Hang Seng Index rose 1.3% after Friday’s data.
Bruce Peng, chief economist and head of research for Greater China at Jones Lang LaSalle, said the economic performance was “in line with market expectations” given weak domestic demand, the still weak real estate market and slowing export growth.
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