China's Q3 GDP growth slows to 6.0% to hit a 27-year low, still within target range

By Li Xuanmin and Huang Ge Source:Global Times Published: 2019/10/18 10:45:47

Photo: Xinhua

China's GDP grew 6.0 percent in the third quarter of 2019, touching a 27-year low amid the impact of a bruising trade war with the US and other downward pressure. But the number is still within the annual target range set by policymakers, and analysts are confident that China could achieve the annual target this year as more stimulus measures kick in and economic potential further unfolds.

In the third quarter, China's GDP rose 6.0 percent, compared with a 6.2 percent growth pace in the second quarter, according to data released by the National Bureau of Statistics on Friday. That translated into a growth rate of 6.2 percent in the first three quarters to 69.78 trillion yuan ($9.87 trillion), the NBS data showed. 

Chinese policymakers have set a target growth range of 6.0-6.5 percent for the full year. 

In the first three quarters, retail sales grew 8.2 percent to 29 trillion yuan, industrial added-value was up 5.6 percent, and fixed-asset investment rose 5.4 percent to 46 trillion yuan, according to the NBS.

The 6.0 percent growth in the third quarter also means there was an increase of about $3.5 trillion in overall GDP over the first half, inching closer to the GDP of Germany. In 2018, the European country's GDP reached $4 trillion, ranking 4th in the world. 

The growth rate in the first nine months is leading major economies globally and ranked No.1 among world economies that have a GDP over $1 trillion, NBS spokesperson Mao Shengyong said at a press briefing of the State Council Information Office on Friday.

"Compared with China's past, the growth is medium to high speed. But in a global context, it is still a high-speed growth," Mao said.

In the fourth quarter, the GDP growth rate is highly likely to continue slowing down but will maintain stable growth, Mao said. He stressed that China's economy will be supported by numerous factors, such as a rebound in basic infrastructure investment, the rising manufacturing industry and a pick-up in automobile sales.

The growth rate in the third quarter showed that downward pressure persists in China's economy, mainly due to sluggish market demand at home and abroad, Liu Xuezhi, a senior economist at the Bank of Communications, told the Global Times on Friday.

Despite downward pressure, China has maintained its momentum in high-quality economic development and the government will increase efforts to roll out macroeconomic policies to stabilize growth, Liu said, noting that the country will insist on prudent monetary policy instead of adopting "flood-irrigation stimulus" measures.

Liu said that China will continue to boost consumption further in the fourth quarter, which will help drive economic growth, but attention should also be paid to challenges like inflation.

Liu noted that it is possible that GDP will continue to slow in the fourth quarter, but that whole-year growth can fall within the country's target range of 6.0 percent to 6.5 percent. "It is unlikely that this year's GDP growth will drop below 6.0 percent."

File photo: VCG

Stable and resilient

"Despite a slowdown, China's economy is relatively stable and resilient. And this is hard-won, because pressure was building," Tian Yun, vice director of the Beijing Economic Operation Association, told the Global Times. 

As exports slumped in the third quarter and certain policy dividends with regard to shoring up investment and spurring consumption need time to take effect, China's economy faced the biggest-ever difficulties during that period, according to Tian. Analysts noted that a series of automobile promotions in June also front-loaded some consumption power, leading to flat retail sales in the third quarter. 

"The prolonged trade war with the US did inflict pain on the economy, but China has withstood the gloom. Pressure will gradually relieve in the fourth quarter," he said. Tian took note of China's large consumer market and its complete industrial chain, which he said differentiates the country from other economies that might have be crushed under the all-round crackdown against China that has ranged from trade to technology. 

A veteran industry insider surnamed Li told the Global Times about 90 percent of the downward pressure China faced originated from the trade war. "Without the impact of the trade war, China could have achieved a rosy GDP growth rate of over 6.5 percent in the third quarter," Tian said.

Industry insiders also noted that because the base of China's economy is very large - the world's second-largest - it is a normal trend that China's GDP growth will slow down.

In September, China's Caixin purchasing managers' index rose to 51.4, the highest in 19 months, pointing to a vigorous private manufacturing environment. 

Analysts also expected policymakers to announce more policies to boost the economy, such as interest rate cuts targeted at the manufacturing sector and financing support.

Posted in: ECONOMY

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