CHINA’S economy beat market expectations in the third quarter by growing 6.9 percent, although that was the slowest in six years, National Bureau of Statistics data showed yesterday.
The country’s gross domestic product was 48.77 trillion yuan (US$7.7 trillion), up 6.9 percent year on year.
Sheng Laiyun, a bureau spokesman, said economic fundamentals remained stable.
“China’s economic growth still moved within a reasonable range, in line with the government target,” Sheng said. “Besides, the employment and people’s income expanded faster than expected, while the service sector also outperformed the overall growth, indicating an optimized economic structure.”
China has set a growth target of around 7 percent for this year, lower than the previous goal of 7.5 percent, after authorities proclaimed a “new normal” of slower expansion but higher quality.
Growth was led by the service sector, which gained 8.4 percent to 25.08 trillion yuan in the first nine months. The manufacturing sector added 6 percent to 19.78 trillion yuan, while agriculture rose 3.8 percent to 3.91 trillion yuan.
People’s disposable income gained 9.2 percent to 16,367 yuan, with rural earnings rising faster than those of urban residents by 1.1 percentage points. The country also achieved its full-year target of creating 10 million jobs by the end of September.
Some economists had expected growth to dip as low as 6.6 percent, after 7 percent in each of the first two quarters.
“China’s third-quarter growth surprised on the upside thanks to a robust service sector,” said Zhu Haibin, chief economist for China at JP Morgan. “But details of the activity data were mixed and somewhat disappointing.”
Industrial production increased 6.2 percent, down 0.1 percentage points to that in the first half of the year. Factories reported an expansion of 5.7 percent in September alone, decelerating from August’s 6.1 percent.
Fixed-asset investment grew 10.3 percent to 39.45 trillion yuan during the first nine months, weakening from the increase of 11.4 percent in the first six. Capital flowing into the property sector rose 2.6 percent, compared to the pace of 4.6 percent in the first half.
Retail sales, a broad gauge of domestic consumption, accelerated 10.5 percent to 21.6 trillion yuan in the first three quarters, slightly better than the first half’s 10.4 percent rise.
One highlight was the online spending, which surged 36.2 percent to 2.59 trillion yuan in the first nine months. In September, retail sales rose 10.9 percent.
Liu Ligang, chief economist for China at Australia & New Zealand Banking Group Ltd, said the third-quarter growth did not alleviate concerns over China’s economy because domestic activity indicators remained low last month.
“We expect GDP growth to remain largely stable in the fourth quarter on the back of supportive policies. Funding constraints on investments have been relaxed as the central bank eased monetary policy and fiscal policy becomes more proactive,” Liu said.
“Meanwhile, continued warm-up of the property market should also help drive the economy back on track. We expect the fourth-quarter growth could be 6.8 percent, leading to a full-year growth of 6.8 percent,” Liu said.
Earlier data showed that China’s trade volume had contracted 7.9 percent in the first three quarters, far behind the government target of an increase of around 6 percent for the year.
The official Purchasing Managers’ Index, a gauge of conditions in the state-owned manufacturing sector, landed at 49.8 in September, pointing at weakening industrial activities for the second straight month.
The Asian Development Bank last month lowered its forecast of China’s 2015 economic growth rate to 6.8 percent.