China grows slower than yearly target for first time since crash

Ben Southwood
Follow Ben
CHINA’S economy grew more slowly than its yearly forecast for the first time since the depths of the financial crisis, data showed yesterday, but some signs suggest China may be able to reverse its slowdown.

GDP grew 7.4 per cent in the third quarter, compared to a year earlier, the National Bureau of Statistics (NBS) said, just under the 7.5 per cent target for 2012 as a whole, set by policymakers headed by Premier Wen Jiabao

But analysts were reassured by the relatively slight drop from growth in the first half of the year – which was 7.8 per cent – and said this new data assuaged worries that China was heading for serious stagnation.

“Those fearing a hard landing will be able to sleep a little better tonight,” said Alistair Thornton at IHS Global Insight.

And the NBS said that one below-target quarter would not cause the world’s second largest economy to miss its yearly forecast. “We have 7.7 per cent growth in September, which laid a solid foundation for achieving the full-year growth target,” a NBS spokesperson claimed. “So we are confident that we can achieve 7.5 per cent full-year growth or above.”

Extra evidence for his case comes from industrial production, retail sales and investment data – all of which came in above forecast.