CHINA: China's economic growth slows in the third quarter as inflation edges higher, showing that the world's second-largest economy is strong but far from overheating

Record ID: 605112

  • Title: CHINA: China's economic growth slows in the third quarter as inflation edges higher, showing that the world's second-largest economy is strong but far from overheating
  • Date: 22nd October 2010
  • Summary: BEIJING, CHINA (OCTOBER 21, 2010) (REUTERS) CHINA'S NATIONAL BUREAU OF STATISTICS SPOKESMAN SHENG LAIYUN WALKING IN TO NEWS CONFERENCE JOURNALISTS SEATED (SOUNDBITE) (Mandarin) CHINA'S NATIONAL BUREAU OF STATISTICS SPOKESMAN SHENG LAIYUN SAYING: "In the first three quarters, faced with the complicated and volatile domestic and international environment and various gran
  • Embargoed: 6th November 2010 12:00
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  • Location: China
  • Country: China
  • Topics: Economic News
  • Reuters ID: LVAD3M23P94ULRTC5JFBRQTHUTKW
  • Story Text: China's economic growth slows in the third quarter as inflation edges higher, showing that the world's second-largest economy is strong but far from overheating.
    China's economic growth ebbed in the third quarter while inflation edged just a touch higher, data published by China's national statistics agency showed on Thursday (October 21).
    The country's gross domestic product growth slowed to 9.6 percent in the third quarter from a year earlier, down from 10.3 percent in the second quarter, and inflation rose in September to 3.6 percent, reaching a 23-month high, according to the National Bureau of Statistics.
    Although the figures were broadly in line with forecasts, the numbers in fact were something of a downside surprise after market chatter that growth and inflation had been much stronger than expected, prompting the surprise rate increase on Tuesday (October 19) .
    But they showed that the world's second-largest economy was far from overheating and the spokesman for the country's National Bureau of Statistics (NBS) said that the results were in line with the policy decisions.
    "In the first three quarters, faced with the complicated and volatile domestic and international environment and various grand challenges, under the correct leadership of the Central Party Committee and the State Council, all regions and departments consistently carried out the packages of policies dealing with the impacts of the international financial crisis and other policies and measures, and protectively pushed forward the transformation of economic development mode and the adjustment of economic structures. As a result, the good developing momentum of economy was further consolidated and the national economy kept moving towards the expected direction of macro-economic control," NBS spokesman Sheng Laiyun told journalists at a news conference in Beijing.
    China's increase of interest rates was an attempt to keep a lid on inflation expectations and cool asset markets, but it also reflected the government's growing confidence in the solidity of the economic recovery.
    "Based on our preliminary judgment, although there is pressure on price increases, if we can manage the inflation expectations well, our targets in the macro-control policy are still within reach," Sheng said.
    Much of the slowdown can be explained by a higher base of comparison after last year's stunning rebound from the global financial crisis, said Simon Rabinovitch, Thomson Reuters Chief China Economics Correspondent.
    "There has been a really, really strong investment rebound after the financial crisis and the government was concerned that things were getting out of control. So what we have seen over the past few quarters is a series of measures to basically bring the economy under control, not to drive it to a sharp slowdown but just to ensure that it doesn't grow too quickly. So I think the government will be really, really satisfied with the data today because it shows that it has been able to avoid either overheating or an overly pronounced slowdown," he said.
    However, inflation was not broad based.
    Food prices, which account for a third of China's consumer price index, rose 8.0 percent year on year in September, while core non-food inflation slowed to 1.4 percent from 1.5 percent a year earlier.
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