China's economy slows again, but bottom seen

China said Thursday its economy grew 7.4 percent in the third quarter, easing for a seventh straight quarter, but the government and analysts said the world's second-largest economy was stabilising. The performance was the weakest since a 6.6 percent expansion in the first three months of 2009, when China was battling the global financial crisis, indicating that woes from around the world were continuing to weigh on China. Growth was slower than the 7.6 percent expansion achieved in this year's second quarter. The announcement marked the latest in a string of figures indicating a weakening in China's once-unstoppable economy, but National Bureau of Statistics (NBS) spokesman Sheng Laiyun said signs pointed to stabilisation. "Judging from figures in the third quarter and particularly in September, the signs that the national economy is stabilising are clearer," Sheng told reporters at a briefing. "The main indicators showed that although growth still slowed, the pace of the decline slowed." The third-quarter result dragged down growth to 7.7 percent for the first nine months of the year, the NBS said. China has set a target of 7.5 percent for full-year growth and has repeatedly said it will achieve that. The third-quarter growth figure matched a 7.4 percent median forecast from a Dow Jones Newswires poll of 14 economists. Lu Ting, Hong Kong-based China economist for Bank of America Merrill Lynch, also took the figures as a positive sign. "Basically it's obvious that the economy is bottoming out, and economic growth will likely be higher in the fourth quarter than the third quarter," he told AFP. China's Premier Wen Jiabao was quoted by state media Wednesday as saying the economy began stabilising over the past three months and should meet 2012 targets. "It can now be confidently said that China's economic growth is basically stabilising," he was quoted as saying. China's economy, which grew an annual average of more than 10 percent in the decade through 2010, has slowed since early last year amid the broader global woes in major export markets Europe and the United States. Government efforts to curb an overheated real-estate market have helped stabilise property prices but have been blamed for dampening demand in related sectors such as construction. Authorities have tried to bolster growth this year by cutting interest rates twice and loosening other monetary policies, but with little success. Lu said the data likely would not lead to any massive stimulus package by the government. Analysts have previously said such a package looked unlikely due to problems blamed on a previous stimulus programme in the wake of the 2008 financial crisis, particularly inflation. Political analysts also believe China will not take any aggressive policy actions ahead of a sensitive Communist Party congress that opens on November 8 and will select a new slate of leaders for the next decade. "But China has been easing its (economic) policies in the past few months and this will likely continue," Lu said. The statistics bureau, meanwhile, said production at China's factories, workshops and mines rose 9.2 percent in September compared with the same month last year. Fixed-asset investments rose 20.5 percent in the first nine months of the year compared with the same period last year, it added. Fixed-asset investments are a key measure of government spending on infrastructure. Retail sales, the main gauge of consumer spending in the world's second-biggest economy, rose 14.2 percent in September, the bureau added.