China’s stabilizing economy arouses rebound expectations

16 january 2013

BEIJING — China’s economic performance in the first three quarters has led some experts to predict a rebound, although the speed of its recovery is still uncertain.

China’s GDP grew by 7.7 percent year on year in the first three quarters, higher than the 7.5-percent annual economic growth target set for 2012.

Provincial growth data echoed the national economic growth rate, media reports stated on Tuesday.

South China’s Guangdong province recorded 7.9-percent year-on-year GDP growth in the January-September period this year, up 0.7 percentage points from the first quarter.

Fixed-asset investment gained strength in Guangdong to reach 1.29 trillion yuan ($204.32 billion) in the last nine months, up 13.9 percent year-on-year from the 9-percent growth seen in May.

Exports also thawed in Guangdong, hitting $417.07 billion, up 6.4 percent from the same period last year.

Guangdong serves as an indicator of the country’s economy, as its response to economic changes is usually half a year ahead of the rest of the country, according to Cheng Jiansan, head of the Research Center for the Pearl River Delta Regional Economy affiliated with the Guangdong Statistics Bureau.

East China’s Zhejiang province, as well as the southeastern province of Fujian and Tianjin municipality, have also seen significantly better economic performance in the last three quarters.

China’s economic growth has started to stabilize and shown positive changes, said a statement released after a State Council meeting presided over by Premier Wen Jiabao last Thursday, adding that the government will continue to prioritize stabilizing growth in the fourth quarter.

Gao Shanwen, chief economist at Essence Securities, said in a Tuesday report in the China Business News that China’s economy has gone through its hardest time.

“The economy is very likely to rebound moderately in the fourth quarter of the year,” Gao said.

Analysts Hao Daming and Zhang Wei at Minsheng Securities agreed with Gao, saying that the upcoming holiday season and further government investment will drive up the economy by the end of the year.

But UBS Securities economist Wang Tao forecast that the economy may be slow to recover, as enterprises’ profits are still on the decline due to dwindling orders and large stockpiles.

The economy may rebound after the fourth quarter this year, buoyed by enterprises’ temporary completion of destocking and a possible decline in commodity prices, Wang said.

In the first nine months of the year, retail sales grew 14.1 percent year on year to 14.94 trillion yuan, while fixed-asset investment rose 20.5 percent year on year to 25.69 trillion yuan.