China’s economy grew 6.7 percent in the third quarter from a year earlier, steady from the previous quarter and in line with expectations, as increased government spending and a property boom offset stubbornly weak exports.
Analysts polled by Reuters had predicted gross domestic product (GDP) data would show the world’s second-largest economy was stabilising, expanding at the same pace as in the first and second quarters and putting it on track to hit the government’s full-year target.
But slumping private investment, surging debt levels and the risk of a property market correction are leaving growth more dependent on government spending and keeping global investors on edge.
Real estate investment growth ticked up to 5.8 percent in January to September, a slight increase from 5.4 percent over the first eight months. But many cities are moving to restrict home sales as prices surge over 50 percent in some places, leading to concerns that growth will take a hit.
“Looking ahead, we think that the cooling measures in property market will weigh on China’s economy over the coming quarters,” Commerzbank economist Zhou Hao in Hong Kong said in a note.
Official data showed consumption contributed 71 percent of GDP growth in the first three quarters of the year, compared to the 66.4 percent contribution for 2015. The increase is partly due to contracting net exports but also indicates some success in rebalancing from investment-led growth.
The economy grew 1.8 percent quarter-on-quarter, the National Bureau of Statistics said on Wednesday, in line with market forecasts and compared with revised 1.9 percent quarterly growth in the second quarter.
The government has set a growth target of 6.5-7 percent for the full year. The economy expanded 6.9 percent in 2015, the slowest pace in a quarter of a century.
The statistics bureau said in a statement that many uncertain factors in the economy remain and that the foundation for sustained growth is not solid.