world growth

world growth

Thursday, October 17, 2013

China's economy grew 7.8% in the third quarter

China's economic growth jumped to 7.8% in the third quarter, analysts polled by AFP forecast ahead of the release of the figures Friday, the first acceleration in the world's second-largest economy for almost a year.

China is likely to meet this year's economic growth target. China is trying to improve the quality of growth, but just focused on the growth rate alone.

The median forecast in a survey of 11 economists saw growth ahead of both the 7.5% logged in the April-June period and 7.7% in the first three months of the year.

"Both the confidence and demand within the country have improved," said Sun Junwei, a Beijing-based economist with HSBC. "Therefore, we feel the economy is on track to have a mild recovery."

The jump was mainly a result of government stimulus since late June that featured increased rail and urban fixed-asset investment, tax cuts and loose monetary policy, economists said.

The measures were taken after the growth in gross domestic product slowed for two consecutive quarters and following a 7.7% expansion for all of 2012 – the worst performance since 1999 (7.7% is actually not bad at all, still the fastest growth rate in the world).

"The economy may have stabilized and rebounded by a small margin thanks to the so-called mini-stimulus since June," said Li Ruoyu, a Beijing-based economist with the State Information Center, a government think tank.

But many of those polled said growth may now have peaked and is likely to ease in the coming months, as the comparable figures in the second half of 2012 were relatively high.

China, which has set 2013’s growth target at 7.5%, is unlikely to have room for more stimulus measures, with tightening possible in some sectors, they added.

"Looking forward, we believe such growth will be difficult to sustain, as real estate tightening measures may return, and an adverse base effect... may cap upward momentum," Shen Jianguang, Mizuho Securities analyst in Hong Kong, wrote in a research note.