China will probably hit the bottom of a 7-quarter long period of economic recession from July to September, but the slow growth is due to the global fiscal crisis and a hazy housing market, which has made recovery chances tepid.
A year ago, China’s GDP increased to 7.4 percent in Q3, NBS (National Bureau of Statistics) said; the economists forecast were missed from the official target of 6.5 percent since the first quarter of 2009.
Retail sales, investment data, industrial production were slightly more than what was predicted. However, GDP growth rate is becoming stronger from quarter to quarter, indicating an end to the financial crisis and the economy will increase in the last quarter.
For the first 9 months of 2012, the annual economic growth was 7.7 percent, slightly less from 7.8 percent in the first six months of 2012. But the National Bureau of Statistics claimed that China can meet the government’s 2012 target of 7.5%.
Sheng Laiyun, NBS spokesman said in a news conference that they have seen 7.5%- increase in September that laid a strong foundation to attain full-year growth. So, they are sure that they can reach 7.5% full-year growth rate or above.
Riskier assets responded confidently, with rise in the Asian shares outside Japan to a seven-month high. But, the Australian dollar, which is sensitive to Chinese demand for industrial products, reached its peak in two weeks.
GDP growth rate at 7.4 % would give a bit of delight in recession-stalked acquired economies. The growth is a sharp decline for China, as GDP rose 9.4 percent in 2011 and the average growth rate for more than three decades is around 10 percent.
Consumption also accelerated, with retail purchases going up by 14.2 percent in September, exceeding the predicted 13.2 percent. The factory output had a growth rate of 9.2 percent, slightly more than the predicted value and more than Augusts’ 8.9 percent.
Real estate business investments that affected 40 more business sectors from steel and cement to furniture was another region of insecurity for economists. It went up to 15.4 percent in the first 9 months of the year, declining from an annual raise of 15.6% from January to August.
Wen Jiabao said that the financial situation in Q3 is comparatively good, and the government is confident of achieving its target. But, the stable slowdown has confused the forecasters constantly this year. In Q1, the early consensus made the growth to go low and was constantly beaten back into its present situation in Q3 followed by a calm uptick in Q4.