By love-89.com The quarterly economic report for China was released on October 18, revealing that the GDP grew by 4.6% year-on-year in the third quarter and by 4.8% for the first three quarters of the year. Notably, prior to the data release, some foreign media had anticipated a GDP growth of only 4.5% for the third quarter, making the actual figure slightly exceed expectations.
In light of this report, several foreign institutions have recently adjusted their growth forecasts for China’s economy upwards. Goldman Sachs raised its projection from 4.7% to 4.9%, while Nomura Securities increased its estimate from 4.5% to 4.6%. BlackRock stated its intention to moderately increase investments in the Chinese stock market. These adjustments not only reflect optimism about the Chinese economy’s prospects but also an expectation regarding the effectiveness of a series of new policies.
On the same day the economic report was published, a set of incremental measures were implemented, including interest rate cuts on deposits, increases in stock repurchases, and inter-agency swap facilities involving securities, funds, and insurance companies. The central bank also announced plans to potentially lower the reserve requirement ratio by 0.25-0.5 percentage points before the end of the year. It seems that there is more to come in terms of incremental policies.
Following the slightly better-than-expected economic growth coupled with these supportive measures, the Chinese stock market saw significant gains on October 18. The Shanghai Composite Index rose by 2.91%, closing at 3261.56 points; the Shenzhen Composite Index climbed by 4.71% to 10357.68 points; and the ChiNext board surged by 7.95%, ending at 2195.10 points.
Looking back at the economic report, there are fluctuations, but the overall trend appears positive. Although GDP growth has varied, it remains close to the target set for the first three quarters.
In evaluating the positive changes in the economy, we can focus on “one acceleration,” “two firsts,” and “one stabilization.” The “one acceleration” refers to the increase in consumption, with retail sales of consumer goods growing by 3.2% year-on-year in September, reflecting a 1.1 percentage point acceleration from the previous month. This improvement, driven by policies encouraging old-for-new exchanges, is significant, as consumer activity is a crucial driver of China’s economic growth.
The “two firsts” highlight a historic achievement in export levels, with the total value of imports and exports for the first three quarters surpassing 32 trillion yuan for the first time ever. Each of the first three quarters exceeded 10 trillion yuan in total trade, marking another historical first. Achieving this amidst heightened global trade protectionism and weakened external demand is no small feat.
The “one stabilization” pertains to fixed asset investment growth, which remained steady at 3.4% for the first nine months, after previously declining for several consecutive months. This stabilization is important as it indicates a potential turnaround after a protracted decline.
With consumption, exports, and investment—the “three engines” of growth—showing signs of stability, there is a foundational base for a recovery in the economy.
Moreover, key indicators from September show marginal improvements in both industrial and service sector production. Industrial output increased by 0.9 percentage points compared to August, marking the first upturn after four months of decline.
These changes underscore the resilience of the Chinese economy, with continued implementation of both existing and new policies bolstering confidence in further development.
During a press conference on October 18, a representative from the National Bureau of Statistics expressed confidence in sustaining the stabilization and recovery observed in September into the fourth quarter. “We are optimistic about meeting our annual goals,” they stated.
Ding Yu, Executive Vice President of the Chinese Academy of Development Planning at Tsinghua University, commented on the incremental policies being strategically aligned with changes in economic conditions. He emphasized the importance of an objective and calm perspective on fluctuating indicators, noting that the decline in export growth in September illustrates the impact of reduced external demand on the economy.
In these challenging times, the proactive, targeted, and critical nature of the package of incremental policies becomes even more evident. Ding believes that relevant authorities have conducted a comprehensive assessment of the situation and that a key focus of these policies is to alter the short-term dynamics of economic performance. Following the concentrated introduction of policies in late September and early October, signals from macroeconomic adjustments should instill confidence and provide tangible support across the board. He expressed confidence that the policy implementation in the fourth quarter would be robust, leaving no room for doubt about this commitment.