China reports "better than expected" economic growth

China said the performance was "better than expected" (Source: Getty)

China’s economy is showing signs of stability after the nation’s government reported growth at an annual rate of 6.7 per cent in the last quarter.

The growth figure for the three months to September was in line with forecasts and at the same rate as the previous two quarters.

Read more: Chinese trade tumbles amid weak demand

The National Bureau of Statistics of China said: “The general performance was better than expected.”

Julian Evans-Pritchard of Capital Economics said in a report: “Economic activity seems to be holding up reasonably well, with few signs that a renewed slowdown is just around the corner.”

Last week the country reported its weakest trade figures for six months at a time of weak demand at home and abroad.

Both exports and imports dropped in the year to August, falling well below economists' expectations and proving the world's second largest economy is not immune from the global growth slowdown.

The figures come after data on Chinese loans earlier this week showed the country’s debt pile was still growing at a double-digit rate – almost twice as fast as GDP.

A number of concerns have been raised about the state of the Chinese banking sector and whether the economy can cope under its high debt burden.

The Bank for International settlements (BIS) recently warned high debt levels could trigger a banking crisis in the world's second largest economy.

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Commenting on the figures, IHS Global Insight said: “Given China’s elevated debt levels, the government cannot maintain aggressive monetary easing to support growth.

“Moreover, the gap between the performances of state and nonstate firms remains large. Investment by state-owned enterprises is growing at double-digit rates, while profits are contracting. In contrast, capital spending by nonstate firms is weak, while their profit growth is more robust.”

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