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China's gross domestic product expanded 9.1 per cent in the third quarter from a year ago
Rate was the slowest pace in more than two years for the world's second-largest economy
China’s gross domestic product expanded 9.1 per cent in the third quarter from a year earlier, the slowest pace in more than two years for the world’s second-largest economy, which expanded 9.5 per cent in the second quarter.
But the slowdown in growth, announced on Tuesday by China’s National Bureau of Statistics, is likely to add to the consensus among most economists that the country is on track for a “soft landing” of moderating growth and cooling inflation.
Consumer inflation in China has been running at three-year highs in recent months and Beijing has been steadily tightening monetary policy over the last year in an attempt to rein in overheated growth and slow rapid price increases.
Inflation is showing signs of having peaked, with the consumer price index rising 6.1 per cent from a year earlier in September, down from a three-year high of 6.5 per cent in July.
The overall economy has now slowed for three consecutive quarters, easing from 9.8 per cent in the fourth quarter last year to 9.7 per cent in the first quarter of this year and 9.5 per cent in the second quarter.
Beijing has lifted interest rates five times and raised the reserve requirement for banks nine times since last October. It has also ordered banks to reduce lending and imposed limits on home purchases to curb fast-rising property prices.
Economists said the biggest risks to the economy are a steep fall in global demand for Chinese exports or a collapse in the overheated Chinese real estate market.
“The greatest downside risk facing China’s short-term outlook emanates from advanced economies,” said Alistair Thornton, an analyst at IHS Global Insight.
If Chinese growth does slow more sharply in the coming months Beijing could loosen monetary policy to support growth, but with inflation still above 6 per cent and growth holding up above 9 per cent most analysts believe policymakers will remain on hold for now.
Smaller export-oriented businesses have been disproportionately affected by Beijing’s tightening policies and many have called on the government to ease policy now.
“China’s export-reliant enterprises are facing their toughest time in years,” Wei Jianguo, a former vice minister of commerce told a Chinese state newspaper. “It’s time to ease macroeconomic policies in the export sector and give exporters easier access to loans.”
Beijing has announced some help for smaller businesses, providing limited tax relief and ordering banks to provide easier access to credit, but many in the export sector say the measures do not go far enough.
