China’s Q3 GDP growth picks up to 7.8%

Allaying fears of a slowdown in the world's second-largest economy, China's GDP registered a 7.8-per cent growth in the third quarter compared to a year ago, according to data released by the National Bureau of Statistics (NBS).

The country's economy expanded 7.5 per cent in the previous quarter, and 7.7 per cent in the first quarter.

"China's economy has maintained a steady growth with major indicators staying within the rational range," Sheng Laiyun, a NBS spokesman said at a press conference.

The economic reversal in the third quarter was on the back of government stimulus and investment in infrastructure as well as delayed effects of increased new lending earlier this year.

Overall, for the nine months, economic growth was 7.7 per cent, giving hopes that for the full year growth could exceed the government's minimum target of 7.5-per cent.

In 2012, China's GDP grew 7.8 per cent for the whole year, the slowest pace since 1999, after hitting a peak value of 14.1 per cent in 2007.

According to some analysts, the third quarter growth reflects strong exports and solid domestic consumption although industrial output growth in September indicates that the recovery is tepid.

It is doubtful whether China, a major global growth engine, can maintain the pace of growth in the fourth quarter.

September exports were unexpectedly down 0.3 per cent compared to a year ago on flagging global demand for Chinese products, particularly in the South East Asian market and some analysts believe that the trend may continue in the coming months. The country had posted a7.2-per cent rise in exports in August and 5.1-per cent increase in July.

Moreover, the government may become under pressure to reduce the pace of credit expansion on worries about debt which would also have a negative impact on growth.

Other economic data released Friday also indicates a more or less stable state of the economy. Industrial production in September increased 10.2 per cent from a year ago, although slightly down from 10.4 per cent in August.

Fixed asset investment was up 20.2 per cent in September, marginally down from 20.3 per cent in August while retail sales, a key indicator of consumer spending, increased 13.3 per cent compared to 13.4 per cent in August.

September inflation was 3.1 per cent from a year earlier, well within the government's target limit of 3.5 per cent.

Many believe that the country will shift its focus from export and investment in infrastructure and real estate to more sustainable domestic consumption-led growth plan.