China's
economy slowed for a seventh straight quarter in July-September,
missing the government's target for the first time since the depths of
the global financial crisis.
While GDP growth at 7.4% would be cause for joy in recession-stalked
developed economies, it represents a sharp slowdown for China, where GDP
grew 9.2% in 2011 and has averaged an annual rate near 10% for three
decades. The government targets growth of 7.5% for the full year -
reduced in 2012 from the previous 8% target - and the consensus
forecast of economists polled by Reuters is that it will deliver on it,
with an expansion of 7.7%.
The National Bureau of Statistics said GDP grew 7.4% in the third
quarter from a year earlier - in line with forecasts from economists
polled by Reuters - the first miss of the official target since 6.5%
growth in the first quarter of 2009. "This is within
expectations, the economy is showing signs of stabilising, that is good
news," said Dong Tao, an economist at Credit Suisse in Hong Kong. "We
think that with rebounding property markets, stabilising export orders,
resuming consumption, we probably have seen the bottom of the economy.
The economy can bounce back quickly."
But the remorseless slowdown has confounded forecasters repeatedly
this year, with the initial consensus call for growth to bottom in the
first quarter being persistently beaten back to its present position of a
trough in the third quarter followed by a mild uptick in the fourth
quarter. Some analysts cite electricity usage growth running at
roughly half the average rate of the last five years as a manifest sign
of economic malaise.
Others disagree. They say there is clear evidence that the financial
system's liquidity taps have been opened wide and that fine-tuning
policies - Beijing's mantra for a year now - are gaining traction. The
fine tuning includes two interest rate cuts, three cuts to the
proportion of deposits banks must keep as reserves - freeing an
estimated 1.2 trillion yuan (£117 billion) for lending - and approvals
in the last month for infrastructure projects worth about $157 billion
(£97 billion), although Beijing has not said explicitly where the money
to fund them is coming from.
