The Chinese economy grew at a rate of 6.8% in the third quarter of the year, compared to Q3 2016, according to official figures. It must be remembered that the world’s second largest economy is still a communist state, so the data must always be viewed with a degree of healthy scepticism. The Chinese set a growth target for the economy for 2017 of 6.5%, so the Q3 data is in line with this projection. No doubt, China will have a burgeoning export market for crystal balls before long. Prior to the Global Financial Crisis, Chinese figures suggest that the country enjoyed three decades with an average growth rate of 10%. Since the crisis, Chinese growth has come in at a more conservative figure, recording an expansion of “just” 6.7% last year.
The Q3 figure nominally suggests that the Chinese economy is slowing since it fell back below the Q2 growth figure which was posted as 6.9%. This apparent deceleration may be attributable to measures being taken to deflate a property bubble and constrain debt without significantly dropping growth. However, Q3 growth has been fuelled by stronger trade and bank lending figures. Nevertheless, if the fiscal policy is tightened, including further reining-in of credit availability, Q4 growth is likely to be more subdued whilst the nominal full year growth figure could still be hit.
The quarterly growth data has been released whilst the Chinese Communist Party is holding its congress which is used to determine the trajectory of the nation in the coming years. The Chinese President Xi Jinping noted that: "China's economy has been transitioning from a phase of rapid growth to a stage of high-quality development.” He said that China will continue with economic and fiscal reforms and be more open to international investors. The nation seeks to transition from being largely reliant on exports as the source of its economic expansion and to develop domestic demand.
Retail sales in China grew by 10.3% in September over their September 2016 level. Factory output saw a 6.6% year-on-year expansion in September whilst fixed investment saw a modest 7.5% rise over the first three quarters of 2017.