China's third-quarter growth quickened to 4.5%, beating forecasts
Growth of 4.6% for the first nine months is a tenth above the floor of Beijing's target, and the beat eases pressure for a large stimulus package.
Key takeaways
China's economy grew 4.5% in real terms in the third quarter from a year earlier, China's National Bureau of Statistics said Monday, above the 4.4% forecast in a Reuters poll and up from a more than three-year low of 4.3% in the second quarter.
Monday's beat eases the pressure on policymakers to roll out a large stimulus package to meet the annual target, Reuters reported. Authorities have expanded help for home buyers and steered cheaper credit toward infrastructure and technology. Reuters said they have held back from a broad package, betting that exports will keep growth inside the official range of 4.5% to 5%.
For the first nine months, growth was 4.6%, a tenth of a percentage point above the floor of that range. It is higher than either of the last two quarters because the first quarter grew 5.0% and the first half grew 4.7%, the bureau reported earlier.
The 4.5% compares the quarter with a year earlier. Against the previous quarter, output rose 1.2%, up from 0.9% and ahead of a 1.1% forecast in the Reuters poll.
"External demand is still keeping the economy afloat, and I think that is also why the government is not really very aggressive in the stimulus," said Ho Woei Chen, an economist at United Overseas Bank in Singapore.
"We see some targeted support here and there, but broad-based easing is not very likely at this point because I think growth is still on target at the bottom of the forecast range," he said.
Exports and factory output stayed strong
A surge in exports and strong factory activity offset persistent weakness in domestic demand, Reuters said.
Industrial production rose 5.5% in September from a year earlier, up from 5.2% in August.
In the first nine months, high-technology manufacturing output rose 14.3% and equipment manufacturing rose 10.2%.
September exports rose 36.3% in U.S. dollar terms, up from 25% in August, China's General Administration of Customs said last week, and the month's surplus was $133.5 billion. Reuters said this year's surplus is on track to top last year's record of $1.2 trillion.
Spending improved, and property did not
Retail sales rose 1.1% in September from a year earlier, up from 0.4% in August and ahead of a 0.6% forecast. Reuters said the gain was the fastest since March, and that spending remained subdued.
"The GDP beat and retail sales surprise reduce the urgency for immediate broad-based easing," said Andy Ji, an Asian foreign-exchange and rates analyst in Shanghai for InTouch Capital Markets, a research firm.
Fixed-asset investment, excluding rural households, fell 7.2% in the first nine months, the same decline as through August. Property development investment fell 20.6%, a steeper fall than the 19.9% decline through August.
The faster headline did not change the bureau's caution. "The issue of insufficient domestic demand remains prominent, and the foundation for steady economic growth still needs to be consolidated," it said.
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Frequently asked questions
How fast did China's economy grow in the third quarter?
It grew 4.5% from a year earlier, up from 4.3% in the second quarter, and output rose 1.2% from the previous quarter.
Why does the beat matter for stimulus?
Reuters reported that it eases pressure on policymakers to roll out a large stimulus package, since growth remains inside the official 4.5% to 5% range.
What drove the growth?
A surge in exports and strong factory activity offset persistent weakness in domestic demand, Reuters said.
Did domestic spending and property improve?
Retail sales rose 1.1% in September, the fastest since March, while property development investment fell 20.6% in the first nine months.
