Shipping containers sit in stacks at the Zhangjiagang Port on October 21, 2022.
Visual China Group | Getty Images
The data was originally set for release on Oct. 18, but was delayed late on Oct. 17 with no explanation. China’s Communist Party held its 20th National Congress from Oct. 16 to Oct. 22.Analysts polled by Reuters prior to Oct. 18 had expected China to report GDP growth of 3.4% for the third quarter.
The officially released 3.9% year-on-year growth for the third quarter marked a pickup from 0.4% in the second quarter, bringing year-to-date growth to 3%.
That’s still well below the official target of around 5.5%.
Covid controls on business activity, especially in the second quarter of the year, have weighed on growth and prompted many investment banks to slash their full-year forecasts to around 3%.
The latest congress did not signal whether the Covid policy would soon end or continue.
China also released trade data for September on Monday after an unexplained silence on the figures, which had been expected out on Oct. 14.
Exports, a major driver of China’s growth, beat expectations with an increase of 5.7% in U.S.-dollar terms in September. Analysts polled by Reuters had forecast a 4.1% increase.
However, imports in U.S.-dollar terms only rose by 0.3% in September from a year ago, missing Reuters’ forecast of 1% growth.
Real estate drags down growth
Overall, the data reflected the impact of Covid controls and the real estate slump, while the automobile industry remained a bright spot under Beijing’s support for new energy vehicles.
Retail sales grew by 2.5% in September from a year ago, slowing from August and missing expectations of 3.3% according to the Reuters poll.
Within retail sales, those of catering fell by 1.7% in September from a year ago. Furniture, home appliances and construction materials also dropped last month from a year earlier.
However, sales of autos, one of the largest categories by value, surged by 14.2% in September from a year ago.
Income ticks up
The urban unemployment rate ticked up to 5.5% in September. That of people ages 16 to 24 remained far higher at 17.9%.
For the first three quarters, per capita disposable income of urban residents rose by 2.3% year-on-year, when accounting for inflation. That’s an average monthly disposable income of 4,165 yuan ($587) for city residents.
Income varies greatly in China by city size and location.
Industrial production beats expectations
Industrial production rose by 6.3% in September from a year ago, well above the 4.5% increase expected by Reuters. Automobile manufacturing surged by nearly 24%, while the country produced more than twice the number of new energy vehicles compared with a year ago.
“Industrial activity has been the source of strength lately,” Goldman Sachs chief Asia-Pacific economist Andrew Tilton said on CNBC’s “Street Signs” Monday. “The big picture is still that the economy is operating well below potential this year.”
Fixed asset investment rose by 5.9% for the first three quarters of the year, a touch below Reuters’ forecast of 6%.
Investment in real estate declined by 8% during that time, greater than the 7.4% year-on-year decline recorded over the first eight months of the year.
Year-to-date investment in infrastructure sped up to 8.6% year-on-year growth as of September, from 8.3% as of August. That in manufacturing held about the same pace.