China GDP: economic recovery regains momentum in third quarter, edges closer to annual target

China's economic recovery is gaining some momentum in the third quarter of the year, with a growth of 1. 3 per cent from the previous quarter. This is a higher growth rate compared to the 0. 8 per cent increase in the second quarter. On a yearly basis, China's Gross Domestic Product (GDP) grew by 4. 9 per cent in the third quarter, according to the National Bureau of Statistics (NBS). This figure is higher than the average economist's prediction of a 4. 5 per cent rise. The growth in the second quarter of the previous year was 6. 3 per cent, largely due to the low base caused by economic shutdowns amid strict coronavirus control measures. The Chinese government has set an annual growth target of around 5 per cent. In the first three quarters of the year, China's economy grew by 5. 2 per cent. The NBS deputy director, Sheng Laiyun, stated that the focus would be on boosting effective domestic demand, invigorating market entities and implementing already released policies to achieve this year's social and economic development goals. He added that due to the low comparison base last year, China's economy only needs to achieve a year-on-year growth of 4. 4 per cent in the fourth quarter to meet the full-year target. However, the subdued property market remains a drag on China's economy. Real estate investment, which accounts for about 20 to 30 per cent of total investment, fell by 9. 1 per cent in the first three quarters, compared with a year earlier. This is a further contraction from the 8. 8 per cent drop in the first eight months of the year. Elsewhere, fixed-asset investment, a significant growth engine, expanded by 3. 1 per cent in the first nine months of the year, compared with the same period last year. This is a decrease from the 3. 2 per cent growth in the first eight months of the year. Retail sales, a major indicator of spending sentiment, grew by 5. 5 per cent in September, compared with 4. 6 per cent growth in August. Industrial output also rose by 4. 5 per cent in September, unchanged from August, but lower than the 4. 6 per cent growth predicted by Wind. The government and the market will shift their focus to the growth outlook for next year. The key issue is what growth target the government will set and how much fiscal easing will take place. Despite improvements in recent economic indicators, the rebound would not be easy, according to Anbound, an independent think tank. They likened China's economy to an extra-long heavily loaded train. Affected by various factors at home and abroad, a slowdown trend has emerged. Due to the massive size of China's economy, this deceleration process shows strong inertia. Once the slowdown begins, it will be difficult to use policies to stop the slowdown.