Economic Watch: China shows strong economic resilience with Q3 data

Source: Xinhua| 2017-10-19 21:04:11|Editor: An
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BEIJING, Oct. 19 (Xinhua) -- China's economy continued its firm growth with gross domestic product expanding 6.9 percent year on year to 59.3288 trillion yuan (8.9614 trillion U.S. dollars) in the first three quarters, official data showed Thursday.

Growth held steady from a 6.9 percent increase in the first half, and is well above the government target of 6.5 percent for the year.

STEADY MEDIUM-HIGH GROWTH

In the third quarter, China's GDP was up 6.8 percent year on year, compared with 6.9 percent in the second quarter, according to the National Bureau of Statistics (NBS).

This is the ninth straight quarter for China to see economic expansion of 6.7 percent to 6.9 percent, maintaining medium-high growth and adding to evidence of further economic resilience, NBS spokesperson Xing Zhihong told a press conference.

"The Chinese economy has maintained steady growth with a positive outlook in the first three quarters," he said.

The continued steady growth leaves room for the world's second largest economy to restructure and upgrade its economy, as Chinese leadership has called for putting quality first in economic development.

China's economy has been transitioning "from a phase of rapid growth to a stage of high-quality development," Xi Jinping said in a report to the 19th National Congress of the Communist Party of China in Beijing Wednesday.

In Jan-Sept, China's value-added industrial output expanded 6.7 percent year on year, faster than the 6 percent increase a year ago. Retail sales of consumer goods grew 10.4 percent year on year, according to the NBS.

Meanwhile, fixed-asset investment rose 7.5 percent from the same period last year, slightly down from 7.8 percent for January-August.

The sound economic expansion in the first three quarters has "further laid a solid foundation for achieving the annual development target," Xing said.

STRUCTURAL IMPROVEMENTS

In Xi's report Wednesday, he said China was going through a pivotal stage in its growth model, improving economic structure, and aiding new growth drivers.

Such transformation is well underway.

"In the past three quarters, improvements have been made in both economic structure and growth quality, and new growth engines are gaining steam," Xing said.

The service sector expanded 7.8 percent year on year in the first three quarters, outpacing a 3.7-percent increase in the primary industry and 6.3 percent in secondary industry, according to the NBS.

Driven by government efforts in economic structural adjustment, the contribution of final consumption to economic growth reached 64.5 percent in the first nine months, up 2.8 percentage points from a year ago.

In his report, Xi stressed the development of the real economy and encouraged industries to move up to the medium-high end of the global value chain.

In the first three quarters, high-tech and equipment manufacturing sectors posted stellar growth, with output up 13.4 percent and 11.6 percent respectively.

Investment also poured into high-tech sectors. For the first nine months, high-tech manufacturing saw investment up by 18.4 percent, up from 11.7 percent during the same period in 2016.

STRONG OUTLOOK

"The fresh data has pointed to resilient growth momentum, especially considering the dampening effect on output and demand from China's environmental protection-related production cuts," Beijing-based investment bank CICC said in a report.

The bank said it remained constructive on China's growth and expected strong consumption growth and resilient investment growth in the fourth quarter and beyond.

Prior to the data release, major international institutions and investment banks, including the IMF and the World Bank, had already raised their forecasts for China's growth this year.

In a report released earlier this month, the IMF raised its forecast for China growth for the fourth time this year, predicting that China's economy will grow 6.8 percent this year and 6.5 percent next year, both 0.1 percentage point higher than previous forecasts.

However, Xing warned that given the still complicated and changing international environment, and that the Chinese economy was still going through a period of structural shifts, more effort was needed to consolidate the positive trend.

In line with recent policy initiatives, economists say they believe China's supply-side structural reform and tough environmental rules will continue, which might dampen growth in the short term but benefit long-term economic health.

"There are signs that underlying demand is still holding up well," said Julia Wang, HSBC economist.

She said the manufacturing sector was on the cusp of a more structural revival in the next two to four years, and the recovery trend in the Chinese economy should continue in 2018.

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