Is China’s economy stabilizing?
October 19, 2016, 4:26 pm

A “Beidouxing X5” rolls off the assembly line in Changhe Automobile Co. in east China’s Jiangxi Province. But investors are worried that Chinese exports have fallen to their lowest level in seven months [Xinhua]

This is the third consecutive quarter that China meets its target of 6.5 to 7 per cent GDP growth this year.

The GDP growth rate, which some analysts suspect may have actually been higher, came on the heels of continued government spending and central bank intervention and a buoyant real estate market.

According to the National Bureau of Statistics (NBS) investment in the real estate sector and home sales soared in September.

This comes despite new regulations, which call for higher mortgage down-payments and a curb on the number of apartments bought in a bid to lower skyrocketing real estate prices.

The policy is also designed to convince investors to change gear and move their investments into the stock markets.

More than 20 cities including Beijing, Shanghai, Shenzhen and Nanjing announced these measures.

Nevertheless, the latest data shows that property investment growth rose 7.8 per cent in September year-on-year, and property sales surged 34 per cent, NBS said.

In other data, exports retreated by 1.6 per cent and imports dipped 2.3 per cent, according to data released by the General Administration of Customs last week.

Year on year, Chinese exports have fallen 10 per cent – the highest such drop in seven months.

What we’re now seeing in the Chinese economy is a drop in exports but a rise in domestic consumption.

This was also reflected in data which showed that industrial production fell 6.1 per cent. In the opposite directions, consumer retail shopping sales surged a whopping 10.7 per cent in Q3.

The data release lifted the benchmark Shanghai Composite Index up 0.03 per cent to 3,084.72, but the Shenzhen index closed 0.36 per cent down to 10,757.92.

The BRICS Post with inputs from Agencies