China economic growth falls to five-year low of 7.3pc

BEIJING, Oct 21 (AFP) : China's gross domestic product (GDP) expanded in the third quarter at its slowest pace since the depths of the global financial crisis, official data showed Tuesday, but analysts said the world's second-largest economy may have bottomed out.
The 7.3 per cent year-on-year increase in July-September was lower than the 7.5 per cent expansion in the previous three months, the National Bureau of Statistics (NBS) said, and the slowest since the 6.6 per cent in the first quarter of 2009.
However, it exceeded the median forecast of 7.2 per cent in an AFP survey of 17 economists.
China's economy-a key driver of global growth-is suffering from a deflating property bubble, a crackdown on corruption and weak demand from Europe, prompting authorities to introduce monetary easing measures.
While the headline figure was likely to add to concerns about the world economy, officials were quick to put a largely positive spin on it.
China showed "good momentum of stable growth" in the first three quarters, said NBS spokesman Sheng Laiyun, with "progress made and quality improved".
But he acknowledged the third-quarter slowdown was partly due to "unexpectedly greater pains brought by the structural reform" which included "still pronounced overcapacity in traditional industries" and a correction in the property market this year.
"The internal and external environment is still complicated and the economic development still faces many challenges," he said.
The NBS said GDP expanded 7.4 per cent in January-September, and Sheng said growth had remained in a "reasonable range" as, among other factors, job creation was stable.
China's official 2014 growth target is about 7.5 per cent in March, the same as last year, though officials including Premier Li Keqiang have openly stated it could come in lower.
The analysts polled by AFP forecast growth of 7.3 per cent this year, unchanged from the previous estimate three months ago but slower than actual growth of 7.7 per cent in 2013.
"The momentum of the economy bottoming out and stabilising is now relatively clear," Ma Xiaoping, a Beijing-based economist for British bank HSBC, told AFP. "Currently there's no risk of an accelerated slowdown," she added.
The NBS also said industrial production, which measures output at factories, workshops and mines, rose 8.0 per cent year-on-year in September, against a more than five-year low of 6.9 per cent in August.
"This is encouraging, as of all the monthly data, industrial production has the strongest correlation with GDP growth, so this bodes well for an economic recovery this quarter," Nomura economists wrote in a reaction note to Tuesday's data.
Retail sales, a key indicator of consumer spending, expanded 11.6 per cent in September, while fixed asset investment, a measure of government spending on infrastructure, rose 16.1 per cent on-year in the first nine months.