* China Q3 GDP +7.4 pct y/y, in line with Reuters poll
* First below-target quarter since Q1 2009
* Seventh successive quarter of slowing GDP growth
By Aileen Wang and Kevin Yao
BEIJING, Oct 18 (Reuters) – China’s economy slowed for a
seventh straight quarter in July-September, missing the
government’s target for the first time since the depths of the
global financial crisis.
The National Bureau of Statistics said GDP grew 7.4 percent
in the third quarter from a year earlier – in line with
forecasts from economists polled by Reuters – the first miss of
the official target since 6.5 percent growth in the first
quarter of 2009.
“This is within expectations, the economy is showing signs
of stabilising, that is good news,” said Dong Tao, an economist
at Credit Suisse in Hong Kong.
“We think that with rebounding property markets, stabilising
export orders, resuming consumption, we probably have seen the
bottom of the economy. The economy can bounce back quickly.”
While GDP growth at 7.4 percent would be cause for joy in
recession-stalked developed economies, it represents a sharp
slowdown for China, where GDP grew 9.2 percent in 2011 and has
averaged an annual rate near 10 percent for three decades.
The government targets growth of 7.5 percent for the full
year – reduced in 2012 from the previous 8 percent target – and
the consensus forecast of economists polled by Reuters is that
it will deliver on it, with an expansion of 7.7 percent.
Indeed, Premier Wen Jiabao was quoted by local media as
saying on Wednesday that the economic situation in the third
quarter was relatively good, and the government was confident of
achieving its goal.
But the remorseless slowdown has confounded forecasters
repeatedly this year, with the initial consensus call for growth
to bottom in the first quarter being persistently beaten back to
its present position of a trough in the third quarter followed
by a mild uptick in the fourth quarter.
Some analysts cite electricity usage growth running at
roughly half the average rate of the last five years as a
manifest sign of economic malaise.
Others disagree. They say there is clear evidence that the
financial system’s liquidity taps have been opened wide and that
fine-tuning policies – Beijing’s mantra for a year now – are
gaining traction.
The fine tuning includes two interest rate cuts, three cuts
to the proportion of deposits banks must keep as reserves –
freeing an estimated 1.2 trillion yuan ($190 billion) for
lending – and approvals in the last month for infrastructure
projects worth about $157 billion, although Beijing has not said
explicitly where the money to fund them is coming from.
