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China's Q3 GDP slows down to 9.1% on drop in exports
Hit hard by a sharp drop in its trade surplus due to decreasing exports and rising inflation, China's GDP growth rate slowed to 9.1 per cent in the third quarter, the lowest since the fourth quarter of 2010, sparking concerns about a possible hard landing of its economy.
China's GDP expanded by 9.1 per cent year-on-year in the third quarter of the year, down from 9.5 per cent in the second quarter and 9.7 per cent in the first quarter, China's National Bureau of Statistics (NBS) said.
The economy expanded by 2.3 per cent in July-September on a quarterly basis, NBS spokesman Sheng Laiyun said at a press conference.
According to preliminary statistics, the country's GDP touched 32.07 trillion yuan (USD 5.01 trillion) in the first nine months, up 9.4 per cent year-on-year, Sheng said.
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China's Q3 GDP slows down to 9.1% on drop in exports
Terming the decline in GDP as a "modest slow down", he said the country's economic performance was "generally good" and had developed in line with macro-economic steps taken by China in the first nine months.
Despite the challenges and uncertainties both at home and abroad, there is a great chance that China's economy will maintain its stable and relatively fast growth in the coming period, boosted by the strong growth momentum, Sheng claimed.
The World Bank projected China's real GDP growth at 9.3 per cent this year, while the Asian Development Bank projected it to grow at around 9.6 per cent.
The slowdown came as China's trade surplus fell for the second straight month in September, dropping by 12.4 per cent year-on-year to USD 14.51 billion due to sluggish global demand and rising costs in domestic markets.
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China's Q3 GDP slows down to 9.1% on drop in exports
Its exports rose to 17.1 per cent year-on-year to reach USD 169.67 billion last month, but at the same time, imports surged by 20.9 per cent to USD 155.16 billion, according to new data released by the General Administration of Customs (GAC).
There have been concerns that the debt crisis in Europe may hurt growth in the region and dent consumer demand.
That is likely to have a big impact on China's export sector, as the EU is the world's biggest purchaser of Chinese goods, with the market worth about USD 380 billion in 2010.
In view of the economic crisis in US and EU, analysts predict a continued drop in China's exports in coming months.
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China's Q3 GDP slows down to 9.1% on drop in exports
"The export growth was slower than expected. It will decline to 10 to 15 per cent in the future as demand continues to weaken," Chang Jian, an economist at Barclays Capital, said.
The Chinese leadership also expressed concern over the drop in exports, with Prime Minister Wen Jiabao stating that China should work to maintain the steady growth of exports despite changes in the external environment.
"Though we need to sustain our economic growth by increasing domestic demand, we should not easily give up our shares in the international market," Wen said last week, adding that equal attention should be given to exports and imports.
Despite the general trend toward slowdown, China hopes to face any major economic crisis in future, as it had a strong foreign exchange reserve base of USD 3.2017 trillion at the end of last month, out of which over USD 1.25 trillion was invested in US bonds.
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China's Q3 GDP slows down to 9.1% on drop in exports
Sheng said in his briefing today there was an obvious trend that China's economic development was shifting from stimulus policy-driven growth to a self-initiated mode.
According to data released today, industrial value-added output rose 13.8 per cent year-on-year in September, up from the 13.5 per cent annual growth recorded in August.
Fixed asset investment rose 24.9 per cent year-on-year in the first nine months, compared to a 25 per cent gain in the January-August period.
In September, the country's retail sales grew 17.7 per cent from a year earlier after a 17 per cent increase in August.
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China's Q3 GDP slows down to 9.1% on drop in exports
On the inflation front, too, Sheng said the consumer price increase had been "preliminarily contained", as growth of the consumer price index (CPI), the main gauge of inflation, has been declining for two consecutive months.
The government made curbing consumer prices a top priority in this year's marco economic regulation and vowed to keep the annual growth of the CPI at around 4 per cent this year.
He said to mop up the excessive liquidity that helps fuel inflation, the government implemented a prudent monetary policy this year.
The central bank has raised the benchmark interest rates three times this year and hiked the reserve requirement ratio for commercial banks six times.
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China's Q3 GDP slows down to 9.1% on drop in exports
The income of China's urban and rural residents continued to increase in the first nine months this year.
In the past three quarters, urban and rural residents' per capita disposable income reached 16,301 yuan (USD 2,557), up 13.7 per cent year-on-year.
After deducting inflation, actual growth was 7.8 per cent, Sheng said. The per capita cash income of rural residents grew by 20.7 per cent to 5,875 yuan. The actual growth, after factoring in price adjustments, was 13.6 per cent, Sheng said.
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China's Q3 GDP slows down to 9.1% on drop in exports
The catering sector generated sales of 1.47 trillion yuan in the first nine months of 2011, a rise of 16.5 per cent from a year earlier, while commodities retail sales increased 17 per cent to 11.61 trillion yuan.
Auto sales grew by 16 per cent during the first three quarters, down 18.9 percentage points from a year earlier.
Sales of furniture jumped 31.4 per cent during the same period, down 7 percentage points from a year earlier, while sales of home appliances and audiovisual equipment climbed 20.5 per cent, down 7.6 percentage points from a year earlier, Sheng said.