China's Q3 GDP growth was 7.8% Y/Y. The number was in line with expectations and didn’t impact markets. Industrial output rose 10.2% compared with a year ago, while retail sales grew 13.3%; both measures were in line with analysts’ expectations.
The result suggests the economy is on target to meet the government’s annual growth target of 7.5%, and ease concerns about a hard landing, but economists are watching for progress in Beijing’s efforts to rebalance the economy,to making it a consumer-led growth economy. And there, the signs are not encouraging. Growth was driven last quarter by government investment in infrastructure , the delayed effects of a lending surge to non-residential accounts at the start of the year, and a small improvement in exports. National Bureau of Statistics spokesman Sheng Laiyun said consumption in the first nine months of the year made up 45.9% of growth while investment contributed 55.8%. (Exports were a 1.7% drag.) The investment ratio is still very high and the rebalancing will take time.
Source: WSJ
