China’s economic growth declines to 6-year low

China’s economy grew at its weakest pace since the global financial crisis in the third quarter, official data showed Monday, fuelling speculation Beijing will unveil fresh stimulus measures.

Though the GDP number of 6.9% reported by China’s National Bureau of Statistics (NBS) beat analyst estimates, it falls short of the Chinese government’s target of 7%.

Private sector forecasters have cut their outlook for China’s growth this year to between 6.5 and 7 percent.

Ipek Ozkardeskaya remarked, ‘To be honest, there is nothing to be enthusiastic about in the meagre 6.9%y/y GDP growth in China, when a rate of 6.8%y/y was expected.

Overall investment rose 10.3% year on year in the first nine months of 2015, the lowest in 15 years. At the same time, retail sales growth rose to 10.9 percent from July’s 10.5 percent.

Property investment, a key engine of China’s growth that has cooled significantly in recent years, also grew slowly, at 2.6 percent.

“All this indicates the restructuring and upgrading of the Chinese economy are going steadily”, said Sheng Laiyun, of the Chinese statistics agency.

While China’s government-supported Shanghai Composite Index traded up all morning on the news, after an initial bump most stock indices fell in Japan, South Korea, Hong Kong, Singapore, and Taiwan.

JP Morgan economist Zhu Haibin said strong service-sector growth figures were “somewhat puzzling” as China’s stock market correction “should have led to service sector deceleration”.

Analysts forecast they would rise 10.8 percent on an annual basis after a rise of 10.8 percent the prior month.

Fathom uses a version of the Li Keqiang index as its own proxy for Chinese growth, a measure that’s suggesting an expansion closer to 3% year-on-year.

Prices of oil were down on Monday on worries regarding the status of economic growth in China, the biggest consumer of energy in the planet, and indications that world oversupply is hampering exports of Saudi crude.

“It’s hard to be overly optimistic about the headline number, especially given the range of other data released today”, said IG Markets analyst Angus Nicholson.

Even if the 7.0 per cent target is attained it would mark the slowest growth in a quarter of a century as activity is weighed down by weak exports, factory overcapacity, a soft property market, high debt levels, a government anti-corruption campaign and slowing investment.

Observers say while the 6.9 per cent GDP was regarded as slightly above expectations, the continued slowdown was expected to put pressure on the government data and is expected to raise pressure on policymakers to step up monetary policy to halt the slowdown. The People’s Bank of China has cut interest rates to record lows and reduced banks’ reserve requirement ratios, the finance ministry has relaxed rules for local authorities to borrow, and the top economic planning body has stepped up project approvals.