China eyes tepid rebound as data signals worst over
By Kevin Yao and Aileen Wang
BEIJING (Reuters) - China likely hit the bottom of a seven-quarter long economic downturn between July and September, but the slowest three months of growth since the depths of the financial crisis and a cloudy housing market outlook make recovery prospects tepid.
GDP grew 7.4 percent in the third quarter from a year ago, the National Bureau of Statistics (NBS) said, in line with forecasts of economists polled by Reuters who expected the first miss of the official target since Q1 2009's 6.5 percent.
Industrial production, retail sales and investment data were all slightly ahead of forecasts, however, and quarter-on-quarter GDP growth was strong, suggesting the worst may be over and the world's No.2 economy will pick up in the final quarter - as a once-a-decade leadership transition gets under way in Beijing.
"Those fearing a hard landing will be able to sleep a little better tonight, but those positioned for a clear recovery might be disappointed," Alistair Thornton, senior China economist at IHS Global Insight wrote in a client note.
"The picture is one of emerging stabilization, not the return of unbridled optimism."
Annual economic growth in the first nine months of the year was 7.7 percent, down slightly from a 7.8 percent rate in the first half of the year, but the NBS insisted China would meet or exceed the government's official 2012 target of 7.5 percent.
"We have 7.7 percent growth in September, which laid a solid foundation for achieving the full-year growth target. So we are confident that we can achieve 7.5 percent full-year growth or above," NBS spokesman, Sheng Laiyun, told a news conference.
Riskier assets reacted positively, with Asian shares outside Japan rising to a 7-month high, while the Australian dollar, sensitive to Chinese demand for industrial commodities, touched its highest in two weeks. Continued...