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China’s gross domestic product grew 4.9 percent year-on-year in the third quarter, exceeding market expectations.
According to China’s National Bureau of Statistics, the economy grew 1.3 percent quarterly, regaining some momentum after growing just 0.5 percent in the April-June period.
Economists polled by Portal had expected year-on-year growth of 4.5 percent for the third quarter. Wednesday’s figures compare with annual GDP growth of 4.5 percent in the first three months of the year and 6.3 percent 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 clear that the external environment is becoming more complex and serious, while domestic demand remains inadequate and the foundation for economic recovery and growth needs to be further consolidated,” the NBS said on Wednesday.
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To push China toward its 5 percent annual growth target – already the lowest in decades – Beijing has sought in recent months to stabilize the real estate and banking sectors and bolster support for the country’s stock market and renminbi.
Alicia García-Herrero, chief Asia-Pacific economist at Natixis, said the scale of stabilization measures showed Beijing was responding to “cracks” in the financial system.
“A mild 5 percent growth this year will not, in my view, be enough to close these gaps,” she said, adding: “If the world goes in the wrong direction…” . . It will be very difficult for China to avoid these rifts becoming even deeper.”
Xi’s government is trying to discourage the Chinese economy from debt-driven real estate investments and financial speculation, as well as unproductive government infrastructure investments.
She wants China’s economic model to be based on more sustainable growth, underpinned by consumer services and high-tech manufacturing, while better supporting Xi’s national security goals.
However, achieving this change has become more difficult after China failed to recover from the pandemic as expected and the slowdown in the country’s real estate sector weakened consumer and business confidence.
Demand for Chinese exports also looks uncertain as the war between Israel and Hamas in the Middle East has exacerbated problems caused by deteriorating US-China relations.
Analysts have cut their forecasts for GDP growth next year to about 4.5 percent.