China’s National Bureau of Statistics reported third-quarter GDP growth of 4.6% year on year, slightly higher than expected. This is less than the second-quarter growth of 4.7% year on year, but on a quarterly basis, the third quarter saw 0.9% expansion compared to 0.7% in the second quarter. Other data such as retail sales and industrial production also exceeded expectations, indicating positive signs of growth in the world’s second-largest economy.
Despite facing public scrutiny over meeting an annual growth target of “around 5%,” the Chinese economy has shown potential for growth. With additional stimulus in the fourth quarter, it is now believed that the full-year GDP growth target of around 5% is within reach. The government is committed to bolstering the economy, offering hope for optimistic growth in the coming years. Economist Tianchen Xu believes that despite challenges, China’s economy is not beyond repair.
In response to disappointing economic data, Chinese officials have introduced measures to support the economy. These measures include cutting the amount of cash banks need to have on hand by 50 basis points and other stimulus efforts to boost consumer sentiment and address issues in the property sector. The Minister of Finance emphasized that the central government has room to increase debt and the deficit, hinting at the potential for a sizable stimulus package.
The Housing Ministry in China recently expanded its “whitelist” of real estate projects and plans to accelerate bank lending for unfinished developments to 4 trillion yuan ($561.8 billion) by the end of the year. These measures aim to support the property sector, which has been struggling, and inject more liquidity into the economy. Overall, the Chinese government is taking proactive steps to stimulate growth and ensure a more stable economic outlook in the face of various challenges. Despite uncertainties, there is reason to be cautiously optimistic about the future of China’s economy.
