China shares rise after growth report eases economy jitters

Chinese leaders have been trying to reassure jittery global markets for months that the economy is under control after a shock devaluation of the yuan and a summer stock market plunge fanned fears of a hard landing.

China’s National Bureau of Statistics said gross domestic product rose 6.9% in the third quarter compared with 7% in the first two quarters.

Nominal GDP, which takes into account the fact the the Chinese statistics authority claims the economy is deflationary, fell to just 6.2% – the weakest level since 1999.

The figures added to fears over the health of the global economy, and a few analysts expressed concern they had been manipulated to understate the gravity of the situation.

Louis Kuijs, an economist at Oxford Economics, said the GDP data indicate China has avoided a sharp slowdown.

Many China watchers query the accuracy of official numbers, with a few suggesting they are manipulated for political reasons.

USA crude was off $1, or 2 percent, at $46.26, in lighter volume trades ahead of Tuesday’s expiry for the November contract as front-month.

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”.

Greater China shares were having a mixed day with mainland stocks rose 0.5 percent while Hong Kong shares slipped 0.3 percent.

The government targets “around seven percent” for 2015.

“As a whole, the good momentum of steady growth did not change in spite of the slight slowdown in the third quarter of 2015”, it said.

But it added: “We must be aware that internal and external conditions are complicated, and downward pressure for economic development still exists”.

Investments by state holding enterprises showed an increase of 11.4 percent, while private investments were up by 10.4 percent, accounting for 64.8 percent of the total investment.

The latest Reuters quarterly poll showed economists expect the central bank will cut interest rates by another 25 basis points (bps) and lower the amount banks must hold as reserves by 50 bps by year-end.

Reliance on hopes of stimulus is not limited to China.