China's third quarter GDP beats expectations, but it's the weakest economic growth since 2009

 
Jessica Morris
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China experienced the weakest growth since 2009 (Source: Getty)

China's economy grew by more than expected in the third quarter of this year, easing fears that it is slowing at a greater pace than previously thought.

China's statistics bureau said this morning that the country's gross domestic product increased 6.9 per cent between July and September from a year ago, beating analysts' estimates for 6.8 per cent growth.

This suggests the economy is on course to meet Chinese Premier Li Keqiang's target of "around seven per cent growth".

However, it was also the weakest growth since 2009, reinforcing beliefs that officials should cut interest rates further and roll out other support measures to avert a sharper slowdown.

China is transitioning away from export-led growth, towards more sustainable domestic, consumption-led growth. But recent developments, such as its decision to allow its currency to move more freely, have fed into fears it was approaching a hard landing - when an economy which has grown rapidly experiences a sharp slowdown.

The Shanghai Composite Index rose 0.03 per cent to 3,392.44 points, while the Shanghai Shenzhen CSI 300 Index was flat at 3,533.92 points.

Read more: China's economic slowdown will hit London's property market hard

"Growth was slightly stronger than expected. We had forecast growth would be slower than the preceding two quarters due to slowing fixed asset investment growth – especially from the property sector,"

"The household sector is holding up better than the more cyclical corporate sector, which reinforces the government’s intention to transition towards a more consumption-driven economy. We will continue to read both services and manufacturing indicators as well as observe a larger pool of anecdotal evidence to form our views on China," Edmund Goh, investment manager at Aberdeen Asset Management, said.

There is widespread scepticism about the reliability of official Chinese data. Some analysts believe current growth is much weaker than government readings, however policymakers deny this.

It comes ahead of Chinese President Xi Jinping's four-day state visit to the UK, with investors expecting the announcement of a number of trade and investment deals. Among these is a multibillion pound deal to build the controversial new nuclear power plant at Hinkley Point in Somerset.

EDF chief executive Jean-Bernard Levy told French state TV yesterday that he expected an announcement to be made during the state visit: "If all goes well, we will be able to announce major news in coming days; the first nuclear new-build in Europe since the Fukushima accident”.

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