adminChina’s economic growth has rebounded to 7.8 percent in the latest quarter after a boost in government spending to reverse a sharp downturn. The data reported yesterday should ease pressure on communist leaders for new stimulus measures to prevent politically dangerous job losses.
That would allow them to focus on what they say is their priority of longer-term reforms aimed at making China’s economy more efficient and productive.
Growth of the world’s second-largest economy accelerated from the previous quarter’s two-decade low of 7.5 percent, according to the National Bureau of Statistics.
“This growth has been stimulated by government investment into the economy and there is concern among some over the sustainability of this growth,” Al Jazeera’s Marga Ortigas, reporting from Guangzhou, said yesterday.
Communist leaders want to steer China’s economy to a slower, more sustainable level based on domestic consumption instead of exports and investment.
The unexpectedly abrupt decline in global demand for Chinese goods prompted Beijing to reverse course temporarily and take targeted steps to prop up growth and avoid job losses.
Communist leaders are due to meet in November to craft an economic development blueprint that reform advocates hope will include market-opening and more financial support to private entrepreneurs.
The country’s top economic official, Premier Li Keqiang, said earlier Beijing would try to keep growth from falling below 7.5 percent.
That is far above levels forecast for the US, Europe and Japan but barely half of 2009’s 14.2 percent growth.
China’s economy rebounded in the third quarter because of the government’s stimulus measures.
Analysts have warned the rebound might not last because growth depends on government spending. Global demand is weak and Chinese consumer spending is growing more slowly than Beijing wants.
Yesterday’s data highlighted the economy’s heavy reliance on government-led investment and the weakness of trade. Trade was so weak that its contribution to overall growth was negative, according to Sheng, and detracted 0.1 percentage point from the quarter’s growth rate.
September exports suffered a rare and unexpectedly sharp decline of 0.3 percent, falling short of forecasts.
The International Monetary Fund is forecasting Chinese growth this year of 7.6 percent, which would be the weakest performance since the early 1990s, and some private sector analysts have cut their growth forecasts for next year to below 7 percent.
In a positive sign for the ruling party, Sheng said the economy created 10 million jobs in the first three quarters of the year. – Al Jazeera
Bongani Ndlovu
Online Reporter