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.
While China produced forecast-beating growth of 6.9 percent in the first half, many economists and investors had expected momentum would start to fade as the government cracks down on riskier lending and speculation in the housing market.
China’ central bank governor said earlier this week that the economy could grow 7 percent in the second half of this year, while stressing that more needed to be done to reduce the risks from a rapid build-up in debt.
“With the China GDP coming in on consensus, whatever bullish sentiment the markets were positioned for…after Zhou Xiaochuan’s comment earlier this week that the economy could grow 7 percent in the second half of the year, should get priced out quickly. The GDP reading could weigh negatively on both mainland stock and currency markets as traders may position for further weakness into year-end suspecting financial curbs will continue to have a negative impact on growth in China,” Stephen Innes, Head of Trading, Asia Pacific said.
“It is a solid result. If the trend that we’ve seen in the last few quarters continues, there is a very good chance that growth in 2017 will be higher than the previous year and that has not happened since 2009. China’s GDP data also reinforces strong global growth outlook. Other data such as retail and industrial output that came out along with GDP support the notion that we should see a robust outcome for Q4. Given that the growth outcome is above the government’s target, there is room for some more reforms and it might come after the politburo meeting,” noted economist Besa Deda said.