China GDP Growth Matches Estimates in Q3


The Chinese economy expanded an annual 6.7 percent in the September quarter of 2016, the same pace as in the previous two quarters.The figure was in line with market expectations, supported by an increase in government spending, fixed asset investment and retail sales while industrial output eased.

From January to September 2016, government spending rose 12.5 percent compared to the same period a year earlier while revenues increased by 5.9 percent.

Fixed-asset investment grew by 8.2 percent year-on-year, compared to a 8.1 percent rise in the first eight months of 2016 and in line with estimates. While investment by state firms jumped by 21.1 percent year-on-year; those by private firms rose 2.5 percent, accelerating from a record low of 2.1 percent in January to August.

In September, retail sales  rose 10.7 percent year-on-year, compared to a 10.6 percent increase in August. It was the fastest growth since December 2015 and slightly above consensus of a 10.6 percent rise. Sales grew for all categories: building materials (+14.2 percent), automobiles (+13.1 percent), personal care (+12.5 percent), office supplies (+10.4 percent), furniture (+8.7 percent), home appliances (+8.6 percent), cosmetics (+7.7 percent), garments (+6.7 percent), telecoms (+5.1 percent), jewelry (+5.0 percent) and oil. oil products (+2.9 percent).

Industrial production went up 6.1 percent from a year earlier, slowing from a 6.3 percent growth in August and missing market expectations of a 6.4 percent rise. Output rose the most in electricity, gas and water production (+7.3 percent), followed by manufacturing (+6.5 percent) and mining (+0.1 percent). 

Figures released earlier showed exports tumbled 10.0 percent year-on-year to USD184.51 billion in September 2016, compared to a 2.8 percent drop in the prior month while market estimated a 3.0 percent drop. In the last twelve months exports rose only in March (+10.7 percent). Imports unexpectedly dropped by 1.9 percent to USD142.52 billion, following a 1.5 percent rise in August and missing expectations of a 1.0 percent growth. 

Considering the first nine months of 2016, the services sector expanded 7.6 percent while the industry sector grew at a slower  6.1 percent.

From January to September 2016, final consumption accounted for 71.0 percent of Chinese economy. Meanwhile, investment contributed 36.8 percent of growth and net exports were a 7.8 percent drag on growth.

For 2016, the Chinese government is targeting the economy to grow between 6.5 to 7.0 percent. A year earlier, the economy expanded by 6.9 percent, the weakest since 1990.

On a quarterly basis, the GDP advanced 1.8 percent, compared to an upwardly revised 1.9 percent expansion in the June quarter and matching market consensus.

National Bureau of Statistics l Rida Husna | rida@tradingeconomics.com
10/19/2016 5:50:32 AM