China's economy picks up pace in Q3 as exports power uneven recovery

BEIJING: China's economic growth rebounded to 4.5 per cent year-on-year in the third quarter, beating expectations and easing the pressure on policymakers to deliver more aggressive stimulus measures to meet the annual target.

The third-quarter gross domestic product growth rate, released by the National Bureau of Statistics (NBS) on Monday (Oct 19), beat the forecast for 4.4 per cent growth in a Reuters poll, and improved from the more-than-three-year low of 4.3 per cent in the April-to-June period.

Beijing has leaned heavily on exports for growth this year, but that engine faces growing pressure as domestic demand remains weak and trade tensions with the European Union escalate.

China's strategy of redirecting credit and resources from property towards high-tech industries has created a two-speed economy, where strong factory output and exports mask weak consumption and private investment.

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For January-September, the economy grew 4.6 per cent, within the range of the government's annual growth target of 4.5 per cent to 5.0 per cent.

On a quarterly basis, the economy expanded 1.2 per cent in the third quarter, surpassing expectations for a 1.1 per cent rise and accelerating from 0.9 per cent in April-June.

China's trade surplus widened more than expected in September as exports surged, keeping the country on track to surpass last year's record surplus of US$1.2 trillion and likely intensifying trade tensions with major partners.

A deal with the EU to rein in Chinese hybrid-vehicle shipments could weigh on the booming auto trade.