China's GDP grew by 9.8% year-on-year in the first three quarters, though economic growth in the third quarter slowed to a one-year low of 4.9% amid unexpected economic challenges, including a power crunch and coronavirus resurgence, but is still within the reasonable growth range, experts said. The country's economy expanded 4.9% both on a one-year and two-year basis in the third quarter, according to the National Bureau of Statistics (NBS). In the first three quarters, China's GDP grew by 9.8% year-on-year and 5.2% on a two-year basis to hit a total of CNY82.31 trillion. The quarterly growth slowed down from the 18.3% growth in the first quarter and 7.9% in the second quarter, and is also slightly below market expectations of 5% in the third quarter. Commenting on China's Q3 GDP growth, NBS Spokesperson Fu Linghui said that China's economy is continuing to recover.”
Paras Anand, Chief Investment Officer, Asia Pacific, at Fidelity International stressed that “the only surprise in China's published GDP figures is that they have not come in lower,” indicating that China's GDP growth is not way beyond market expectation, considering the wave of monetary, fiscal and regulatory tightening in China. In comparison, Vietnam's GDP shrank 6.17% in the third quarter, while the U.S. economy only grew at 1.6% in the second quarter. China's consumption also picked up with a year-on-year growth rate of 4.4% in retail sales in September, up 1.9 percentage points compared with August. But China's industrial production rose by 3.1% in September from one year earlier, down from 5.3% growth in the previous month. Meanwhile, the growth in China's fixed-assets investment (FAI) also slowed 1.6 percentage points in the first three quarters compared with the first eight months.
“Currently, the biggest challenge comes from the investment sector, as market expectations for the property market are trending down as a result of banks' tightening of home loan requirements as well as the Evergrande debt crisis,” said Wu Chaoming, Chief Economist at Chasing Securities. Experts noted that short-term negative factors such as the power crunch would likely ease in the fourth quarter with the recently launched power pricing reforms. Furthermore, Q4 consumption would also likely rebound from Q3. With the negative influences easing, China's GDP growth in the fourth quarter might hit between 2.5% and 3%, sending economic growth for the whole year to 8%, which is higher than the government's target. Economists also said that the Chinese government might make some policy changes in the face of the growth slowdown, such as launching special local government bonds ahead of schedule, the Global Times reports.
