China's growth slowest since global crisis, annual target at risk

Tue Oct 21, 2014 11:30am EDT
 
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By Jake Spring and Xiaoyi Shao

BEIJING (Reuters) - China grew at its slowest pace since the global financial crisis in the September quarter and risks missing its official target for the first time in 15 years, adding to concerns the world's second-largest economy is becoming a drag on global growth.

A pick-up in factory output and government confidence that the labor market remains stable were offset by further slowing in the property sector, and economists remained divided on whether authorities would step in with major stimulus measures such as interest rate cuts.

China's gross domestic product grew 7.3 percent in the third quarter from a year earlier, official data showed on Tuesday, the weakest rate since the first quarter of 2009.

That was slightly above the 7.2 percent forecast by analysts but slower than 7.5 percent in the second quarter, and even then some economists were surprised.

"It's hard to square the GDP print with the industrial production numbers for the quarter," said Andrew Polk, economist at the Conference Board in Beijing, one of the more pessimistic research houses on the Chinese economy.

"There are confusing things going on. You have credit growing at the slowest pace since 2002. You have real estate investment slowing on a monthly basis and you have industrial production averaging slightly above 8 percent on a quarterly basis, slightly down from Q2. With that being the most reliable component of GDP on a quarterly basis, 7.3 percent seems a bit high to me."

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Employees work at a shoe factory in Lishui, Zhejiang province, in this January 24, 2013 file photo.  REUTERS/Lang Lang/Files