Q3 GDP growth rate forecast to slow to 6.1%

By Ma Jingjing and Huang Ge Source:Global Times Published: 2019/10/17 21:18:40

Economy still healthy given rising employment, disposable income: expert

A worker sets up scaffolding at a construction site in Beijing on Wednesday. Photo: AFP

With China scheduled to release GDP data for the third quarter on Friday, experts forecast that growth likely slowed to 6.1 percent, mostly due to the performance of exports and retail consumption.

The estimated figure - though lower than the previous two quarters - is still within the government's target range of 6.0-6.5 percent for the year.

Economic restructuring has continued in the third quarter, said Hua Changchun, chief economist at Guotai Junan Securities. The automobile promotion events in June front-loaded some consumption, leading to a drop in the retail sector in the past three months, he said.

In addition, due to the prolonged trade war with the US, China's exports of both labor-intensive and high-technology products were adversely affected in the third quarter, Hua said.

However, despite global uncertainties and the trade war initiated by the US, China managed to achieve steady trade growth in the first three quarters of this year.

Data from the General Administration of Customs showed on Monday that the country's foreign trade increased 2.8 percent year-on-year from January to September.

The composite purchasing managers' index rose to 53.1 in September from 53 in August, showing domestic companies' manufacturing and services remain stable, according to the National Bureau of Statistics (NBS).

Cao Yuanzheng, chief economist at Bank of China International, told the Global Times on Thursday that people shouldn't obsess over quarterly GDP figures, as the country is shifting from high-speed growth to high-quality development.

"For high-quality development, we need to look at whether jobs and incomes continue to grow," Cao said. 

According to the NBS, China created 9.84 million urban jobs in the first eight months of this year, accounting for 89.5 percent of the year's target. 

Real per capita disposable income was 15,294 yuan ($2,227) in the first half of 2019, up 6.5 percent after adjustment for inflation. During the same period, GDP grew 6.3 percent.

Given the large size of China's economy and the laws of economic development, China's GDP growth may be slower in the long run, but it doesn't mean China's economy is deteriorating, according to Cao. "Instead, we can see that China's economy remains reasonable and healthy. Furthermore, the country is increasing investment in new technologies to upgrade industries."

The IMF forecast in its latest report issued on Tuesday that China's growth will be 6.1 percent in 2019, 0.2 percentage points lower than the previous projection in April. It also slashed the world growth forecast to 3 percent in 2019, down 0.3 percentage points from April.

China's economy is still resilient enough, experts said, adding that the central government is expected to announce more stimulus to boost the economy, such as interest rate cuts targeted at the manufacturing sector and stronger financing support.

The Chinese government has strengthened support for economic development with major tax and rate cuts and has eased foreign investment restrictions in its finance market.

Premier Li Keqiang on Monday told provincial governors that the country should step up efforts to enhance the economy's resilience, address downward pressure and increase employment.

China and the US agreed on the outlines of a partial accord on October 11, offering a temporary reprieve from further tariff hikes between the two countries. An industry insider surnamed Li warned that the trade war, if not stopped, will take a heavier toll on the economies of US and China, an bring the global economy downhill.


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