SHENZHEN - China's economic growth continued to decelerate in the third quarter of 2024, with the gross domestic product (GDP) expanding by 4.6% year-on-year, slightly exceeding market expectations but marking the lowest growth in six quarters.
The GDP growth for the period from July to September fell from 4.7% in the previous quarter, surpassing the 4.5% forecast by economists, attributed to stronger-than-anticipated data in September, which showed improvements in factory output, retail sales, and fixed asset investments.
National statistics bureau deputy commissioner Sheng Laiyun indicated signs of stabilization in the economy, although he cautioned that the foundations for a robust recovery remain weak. Policymakers have intensified efforts to stimulate the economy, aiming for a growth target of around 5% for 2024.
Retail sales grew at a four-month high of 3.2% in September, boosted by a consumer trade-in program incentivizing purchases of selected products. However, sales of discretionary items, such as jewelry and cosmetics, saw significant declines, reflecting ongoing weak consumer confidence.
Industrial output rose 5.4% year-on-year in September, driven by high-tech manufacturing, but continued to face challenges from the struggling property sector, which saw new home prices drop at the fastest rate since May 2015.
In a related development, the People's Bank of China (PBoC) announced a support program for stock buybacks and hinted at potential cuts to the reserve requirement ratio (RRR) for banks by 25 to 50 basis points before year-end. Analysts suggest that substantial fiscal stimulus is necessary to bolster consumer spending and sustain the recovery in Chinese equities.