China’s economic engine is showing signs of life as the latest figures from the National Bureau of Statistics reveal a surprising boost in third-quarter GDP.
The data indicates that the world’s second-largest economy expanded by 4.9% year-on-year, surpassing economists’ expectations and easing concerns about an economic slowdown.
This growth was underpinned by robust consumer spending, which ranged from dining out to buying cars and alcohol, delivering a much-needed shot in the arm.
Economists attribute this surge to government stimulus measures finally taking effect.
The retail sector, in particular, recorded impressive growth, with the biggest monthly jump since May. The jobless rate also hit a nearly two-year low, reflecting improved employment conditions.
President Xi Jinping’s government aims to reach an annual growth goal of around 5% for 2023, and the latest data gives them confidence in achieving this target.
Nevertheless, to secure this, GDP must continue to grow more than 4.4% in the final quarter of the year.
While global markets reacted positively, domestic equities, especially in the property sector, remained subdued.
The property crisis continues to cast a shadow over the nation’s economic outlook. Property investment plummeted by 9.1% in the first nine months of the year, and home sales and construction starts also suffered significant declines.
The government has attempted to address this issue with measures such as reducing downpayment requirements and mortgage rates, but they have yet to yield substantial results.
Despite some promising indicators, experts warn that it’s too early to celebrate a full economic recovery. Weak sentiment in the property sector and concerns about insufficient domestic demand still persist.
As authorities consider issuing sovereign bonds for infrastructure investment and mull ways to bolster stock market confidence, the path to sustained growth remains uncertain.
