China’s gross domestic product grew 4.9 per cent year on year in the third quarter, beating market expectations.
The economy expanded 1.3 per cent on a quarterly basis, China’s National Bureau of Statistics said, regaining some momentum after growth of just 0.5 per cent in the April-June period.
Economists polled by Reuters had expected third-quarter year-on-year growth of 4.5 per cent. Wednesday’s figure compares with year-on-year GDP growth of 4.5 per cent in the first three months of the year and 6.3 per cent in the second quarter.
The stronger year-on-year growth figures also reflect a comparison with a period of rolling lockdowns in China last year, before the end of Xi Jinping’s pandemic controls.
Chinese officials struck a cautious tone. “We should be aware that the external environment is becoming more complex and grave while the domestic demand remains insufficient and the foundation for economic recovery and growth needs to be further consolidated,” the NBS said on Wednesday.
To push China towards its annual growth target of 5 per cent — already the lowest in decades — Beijing has in recent months tried to stabilise the property and banking sectors and shore up support for the country’s stock market and renminbi.
Alicia García-Herrero, chief Asia-Pacific economist at Natixis, said the breadth of the stabilisation measures showed Beijing was responding to “cracks” emerging in the financial system.
“Mild growth of 5 per cent for the year won’t be enough, it seems to me, to cover those cracks,” she said, adding: “If the world goes in the wrong direction . . . it is going to be very difficult for China to avoid those cracks getting deeper.”
Xi’s administration is trying to steer the Chinese economy away from debt-fuelled property investment and financial speculation as well as unproductive state infrastructure investments.
It wants China’s economic model to be based on more sustainable growth, underpinned by consumer services and high-tech manufacturing, while also better supporting Xi’s national security objectives.
However, achieving that shift has been made more difficult after China failed to rebound as expected from the pandemic and as the country’s property sector slowdown saps consumer and business confidence.
Demand for China’s exports is also looking shaky as the war between Israel and Hamas in the Middle East has added to problems caused by a deterioration in US-China ties.
Analysts have trimmed forecasts for next year’s GDP growth to about 4.5 per cent.