China’s GDP expands to 7.3 percent but overall slow growth makes this year the worse since 2009.
Quarterly figures indicating the change in the inflation-adjusted value of all goods and services produced by the economy were released this morning in China.
The statement from the National Bureau of Statistics of China reported: “According to preliminary estimation,
GDP of China in the first three quarters of this year was 41,990.8 billion yuan, a year-on-year increase of 7.4 percent calculated at comparable prices.
The year-on-year growth was 7.4 percent for the first quarter, 7.5 percent for the second quarter and 7.3 percent for the third quarter.
Though still growing, China’s GDP is low against its target. Reasons are mainly domestic in nature:
Housing – Residential sales were down 9.3% in Q2. There has been oversupply to the market following several years of growth but investment has slowed down from a rise of 13.2% last year to that of 12.5% over the same 9 month period in 2014.
Commodities – The slump in steel demand and the subsequent plummet in price of Chinese steel reflects low construction with some rebar down to $424 a tonne, signifying the first fall in steel in 19 years. Average steel prices dropped by 13% across China.
Retail Sales – though September showed a slight repair, there has generally been a slow down across the year.
Industrial production – Output has deflated for 32 months now to a level of 8%, the lowest since May 2009 with its last highest level in April 2010 being 20.7%
The lower figure was expected by analysts due to many signs being available:
Consumer inflation is at a five-year low
Export growth is at a 19 month high
Financial reforms are under pressure
World Bank cut the China GDP forecast
From the National Bureau of Statistics of China:
“ In the first three quarters of 2014, faced with the complicated conditions at home and abroad, the Central Party Committee and the State Council grasped the general trend of development and committed to the tone of moving forward while maintaining stability as well as promoting reform and innovation, adopted scientific measures to stabilize economic growth, promote reforms, enhance restructuring, benefit people and control risks, and paid more attention to targeted regulation on the basis of the ranged approach. The general economic performance was moving by steady steps in the new normal with progress made and quality improved.