Chinas economy witnesses major slump in growth at 6.3%

China’s third quarter economic growth has slowed to 6.9% – its lowest level since the financial crisis in 2009.

Chovanec questioned whether it was a “genuine number” and said that China’s National Bureau of Statistics had given little explanation of why it had overshot market expectations. The figure, as it had done in three of the four prior GDP releases, managed to beat the median market forecast for growth of 6.8%.

Overall investment rose 10.3% year on year in the first nine months of 2015, the lowest in 15 years.

The main bright spots, analysts said, were growth in the service sector – which was up more than 11 percent – and in retail, which expanded by 10.9 percent year-on-year in September, up from 10.8 percent in August. Flaws with how the GDP deflator is calculated, along with political pressure to meet growth targets that have become increasingly at risk, have meant that official growth rates have not slowed almost as quickly as most third party measures of growth in recent years.

Even as old growth drivers such as investment and exports lose steam, services and high-tech industries are fast emerging as new growth drivers, an indication that China’s ambition to bring the economy onto a more sustainable track is coming to fruition.

Much of China’s slowdown over the past five years is self-imposed as communist leaders try to steer the economy to more self-sustaining growth based on domestic consumption and service industry instead of trade and investment. Earlier this month, China pledged to start following a stricter global standard in calculating its data. “Expectation of a U.S. interest rate hike prompted volatility in commodity prices, stocks and foreign currency markets”.

Or to state the bleedin’ obvious, we are still a few way from a robust understanding of both the current condition of China’s complex sprawling economy and its direction – with the implication that our prosperity will be determined both by the changing reality and the changing perception of what’s going on there.

However President Xi Jinping acknowledged in an interview with Reuters on Saturday that there were “concerns about the Chinese economy”. In August, it rose 0.53% from the preceding month.

The result is the first official confirmation of investors’ fears over growth in the world’s number two economy and follows a string of weak indicators including on trade and manufacturing activity.

Besides concerns about China’s GDP data, a supply overhang has also put downward pressure on crude oil.

As the second largest economy in the world, China’s industrial production is a reasonable proxy for global consumption.

Economists also expect the central bank to cut benchmark interest rates again before the end of 2015, as well as make another reduction in banks’ required reserve ratio.

– Other support measures have included increased government spending on infrastructure and the easing of curbs on the ailing property sector, which have succeeded in reviving weak home sales and prices but have not yet reversed a sharp decline in new construction which is weighing on demand for materials from cement to steel.