China’s Q3 GDP beats expectations, but few believe it

AFTER nearly a week of delay, China released on Monday (Oct 24) better-than-expected gross domestic product (GDP) growth for the third quarter.

But the market was unimpressed, with Hong Kong’s Hang Seng Index tumbling more than 6 per cent to a 13-year low and some economists slashing further their growth projections for this quarter. Some also blamed the market rout on the make-up of China’s latest Politburo Standing Committee, which signals continuing Covid restrictions.

China’s GDP for the third quarter rebounded to 3.9 per cent on year, higher than the 0.4 per cent on year in the second quarter, beating market expectations of a 3.3 per cent growth, thanks to a raft of government support measures. But most economists took the robust release with a “pinch of salt”. The data was originally scheduled for release on Oct 18 but was delayed until after the Communist Party Congress which took place last week. Standard Chartered economists said their calculation shows that “overall economic activity remained three per cent below trend, due to a negative output gap of minus 5.8 per cent for the tertiary sector, calling for continued support for an economic recovery”.