China’s Q3 data shows 5 per cent growth target ‘well within reach’

WASHINGTON (APP): China’s recently released economic data shows that a 5-percent year-on-year gross domestic product (GDP) growth is “well within reach,” a veteran China watcher said Friday.

“The Q3 numbers just released do not support the downward economic spiral hypothesis, rather they support the view of a modest recovery from Q2 making 5 percent year-on-year GDP growth well within reach,” Nicholas Lardy, a senior fellow at Washington D.C.-based think tank the Peterson Institute for International Economics (PIIE), told Xinhua via email.

China’s economy expanded 4.9 percent year on year in the third quarter, and went up 1.3 percent on a quarter-on-quarter basis. It grew 5.2 percent year on year in the first three quarters of 2023, according to the National Bureau of Statistics. Lardy, an expert on the Chinese economy, noted that the quarterly growth of 1.3 percent is almost two-thirds more than that of 0.8 percent in the second quater.

“Per capita disposable income continues to grow more rapidly than GDP per capita and per capita consumption continues to grow more rapidly than per capita disposable income — continuing trends of the first half that I identified in August as positive and counter to the increased saving/household uncertainty hypothesis,” said Lardy. China’s core consumer price index (CPI), which excludes volatile food and energy prices, went up 0.8 percent year on year in September.

“Producer goods prices continue to fall, but at slower pace. Little support for the deflation hypothesis,” said Lardy. The veteran China watcher also noted that private investment in the first three quarters fell by 0.6 percent about the same pace as earlier, but private investment excluding property grew at 9.1 percent, slightly below the 9.4 percent reported for the first half.

Private investment excluding property continues to grow more rapidly than state investment, Lardy said, adding there is “little support for general private sector uncertainty slowing growth.” “Property investment continues to slow, which I regard as a good thing, a much needed correction,” he said.