The growth of the Chinese economy stood at 7.8% in the third quarter of 2013, marking its first acceleration after two quarters of slowdown, the government announced Friday (October 18th).
This figure corresponds exactly to the median forecast of the panel of 11 analysts interviewed by AFP. In the first nine months of the year, the Chinese gross domestic product (GDP) grew by 7.7%, said the National Bureau of Statistics (SNB).
“Despite the volatility of the growth rate, the internal structure of the Chinese economy and the quality of growth have improved,” said BNS spokesman Sheng Laiyun.
While Chinese growth had recorded last year, with + 7.7%, its weakest performance for 13 years, Beijing has set itself a target of + 7.5% for 2013. After a decline in the first quarter 2013 (+ 7.7%), growth then fell to 7.5% in the second quarter.
Fears of a hard landing
This sharp slowdown had heightened fears of a hard landing for the world’s second-largest economy and prompted Beijing to announce “adjustment measures” at the end of July to stimulate activity, including tax exemptions and administrative simplifications.
Since then, a burst of encouraging statistics published in the last two months had attested to an upturn in economic activity.
Thus, the acceleration in GDP “is partly due to last year’s basis for comparison, and partly to good quarterly statistics, in particular industrial production, which all rebounded slightly” over the period, explained to AFP Ma Xiaoping, economist at HSBC.
In September, industrial production in China rose 10.2% year-on-year, the SNB said on Friday, slightly lower than the previous month but stronger than expected by analysts.
Retail sales for their part slowed slightly in September, up 13.3% over one year, while analysts polled by the Dow Jones Newswires agency expected an acceleration.
The Chinese economy continues to be strongly driven by investment in fixed assets, which grew 20.2% over the first nine months of the year, a little less than expected.
Better for developed countries
Another favorable factor, “many developed economies pulled out of the recession in the second quarter and are starting to recover, which has been positive for the stabilization and expansion of Chinese exports,” said Sheng Laiyun of the BNS.
In fact, Chinese foreign trade recorded a marked jump during the summer, after months of slowing exports and falling imports, before posting more mixed results for the month of September.
“Despite the slowdown in some economic indicators (compared to August), they are progressing at high rates”, commented Mr. Sheng, while acknowledging that “the internal structure of the economy still needs to undergo fundamental improvements”.
“The main indicators remain within a reasonable range, which pleads in favor of promoting measures to restructure the economy and the pursuit of reforms,” the SNB insisted in a press release. .
According to experts, the government could indeed soon moderate its measures to support the economy, in particular to curb a sharp acceleration in inflation, and should again emphasize its policy of rebalancing the Chinese economy.
“It is likely that the government will put a damper on its pro-growth rhetoric (…) it will restrict credit expansion and decide not to extend the mini-stimulus package”, even if it will avoid abruptly reducing credit businesses, Bank of America experts Merrill Lynch said.
Towards a change in monetary policy?
“The central bank could engage in a neutral monetary policy, rather than further relax the availability of liquidity” in the market, said Ms. Ma.
The government could however use the fiscal tool to “further stimulate investment in infrastructure, such as urban renewal programs,” she said.
Since taking office in March, Premier Li Keqiang has stated his goal of making Chinese growth less dependent on exports and heavy infrastructure investment – in order to reduce severe industrial overcapacity and shake up monopolies of state-owned companies.
“We are going to accelerate the transformation of our growth model” and “intensify economic restructuring”, confirmed Li Keqiang at the end of September.
At the cost of a possible slowdown in growth, but which will be done “smoothly” and in a controlled manner, President Xi Jinping said last week, during a trip to Southeast Asia.