China Q3 GDP growth eases as expected to 6.8% as property measures bite

China’s economic growth slowed slightly in the third quarter, as expected, as the government’s efforts to rein in the property market and debt risks tempered activity in the world’s second-largest economy.
People buy vegetables at a fresh food market in Beijing.
People buy vegetables at a fresh food market in Beijing.PHOTO: REUTERS

BEIJING (REUTERS) - China's economic growth slowed slightly as expected in the third quarter as the government's efforts to rein in the property market and debt risks tempered activity in the world's second-largest economy.

The economy grew 6.8 per cent in the third quarter from a year earlier, in line with the estimate produced by a Reuters poll and down from 6.9 per cent in the second quarter, the National Bureau of Statistics said on Thursday (Oct 19).

Analysts had penciled in a gradual GDP slowdown due to an expected softening in property investment and construction as more cities try to cool surging housing prices, while a government campaign against riskier lending pushes up borrowing costs.

New construction starts measured by floor area rose 6.8 per cent in January-September, slowing from a 7.6 per cent rise in the first eight months of the year, the NBS said.

While policymakers' efforts to curb property market speculation and cut debt are expected to have hit growth in some parts of the world's second largest economy, activity has been supported by better-than-expected expansion in trade and bank lending.

Beijing has set a slightly more modest growth target of around 6.5 per cent for 2017, theoretically offering more room for reforms after the economy grew 6.7 per cent in 2016 - the weakest pace in 26 years.

GDP in the third quarter grew 1.7 per cent quarter-on-quarter, compared with growth of 1.8 percent in April-June, which was revised up from initially reported 1.7 per cent growth.

Analysts had expected third quarter GDP would grow 1.7 per cent on a quarterly basis.

China's factory output grew 6.6 per cent in September from a year earlier, beating expectations, while fixed-asset investment expanded 7.5 per cent in the first nine months of the year, missing forecasts.

Retail sales rose 10.3 per cent in September from a year earlier, compared with analysts' expectations for a 10.2 per cent rise.

Data last week showed China's import and export growth accelerated in September, suggesting the economy is still expanding at a healthy pace. China's banks also extended more loans than expected last month, buoyed by demand from home buyers and companies.