Boosted by Beijing’s fine tuning measures, growth increased in the third quarter and climbed from the 7.5% level posted during the three months before.
While the figures will be welcome news for some investors, and lifted the FTSE 100 to its seventh consecutive day of gains, Chinese officials also revealed that activity growth had softened during September, curbing enthusiasm for the months ahead even if nominal GDP growth recovered from 8% to 10.4% year on year, rising at its fastest pace in six quarters.
Commenting on the data, Schroders’ emerging market economist Craig Botham pointed to the risks that lie ahead.
He said: “Monthly activity data points to deceleration in the final quarter. Fixed asset investment, industrial production, retail sales and trade data releases have all been weaker in September than in August, and consequently, we expect a weaker GDP figure for the fourth quarter.”
If such a scenario were to play out, research consultancy Capital Economics said it could reawaken fears of a Chinese hard landing.
But on balance, Botham said that following the third quarter’s rebound it was unlikely that China would miss its 7.5% growth target for the year, even if the latest batch of data was too weak to soothe nervous investors.
In contrast, Capital said it was clear that the Tiger’s recovery was already fading. “This could be as good as it gets. With the headline GDP number in line with consensus, the most important news today was the further evidence in the September data that momentum is peaking,” said Mark Williams, Capital’s chief Asia economist.
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