China has announced in the past week a series of measures aimed at boosting its economy ahead of a key Politburo meeting later this week focused on reviewing the first half performance of the world’s second-largest economy.
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China’s National Bureau of Statistics on Friday reported third-quarter GDP growth of 4.6% year on year, slightly exceeding the 4.5% expected by economists polled by Reuters.
That’s less than the second-quarter growth of 4.7% year on year. On a quarterly basis, the third quarter saw 0.9% expansion, compared to 0.7% in the second quarter.
“The national economy showed positive signs of growth in September,” Sheng Laiyun, the bureau’s deputy commissioner, said at the press conference, according to CNBC’s translation of the Chinese. “The confidence is building up to hit the full-year growth target of around 5%.”
Other data released on Friday, such as retail sales and industrial production, had also beat expectations, a hopeful sign for the world’s second largest economy.
Beijing has faced growing public scrutiny over its ability to meet its own annual growth target of “around 5%.”
“Since real GDP expanded by 4.8% in the first three quarters of the year, the full year GDP growth target of around 5% is now within reach with extra stimulus in Q4,” said Tianchen Xu, senior economist at The Economist Intelligence Unit.
“Despite the multitude of challenges, China’s economy is not incurable as some would suggest,” Xu added. “There’s reason to be more optimistic about growth in the coming years, given how the government is committed to shoring up the economy.”
After the release of a slew of disappointing economic data, Chinese officials last month announced a slate of support measures to jumpstart its sluggish economy, including cutting the amount of cash the banks needs to have on hand by 50 basis points.
Authorities continued to dip feed more stimulus measures throughout this month amid low consumer sentiment and a flagging property sector. Over the weekend, China’s Minister of Finance Lan Fo’an told reporters that the central government has room to increase debt and the deficit, without giving any details on the size of the package.
Mainland China’s CSI 300 was trading up 0.7% and Hong Kong’s Hang Seng index was up 1.3% following Friday’s data release.
Bruce Pang, chief economist and head of research for Greater China at JLL, said that the performance of the economy “aligns with market expectations, given the weak domestic demand, a still struggling housing market, and slowing export growth.”