China’s Growth Slows, Service Sector Shines
Chinese Mainland added 242 USD billionaires in Y 2015, bringing its total to 596, which for the 1st time has outnumbered the 537 billionaires in the United States.
China’s economy posted a 6.9% growth In Q-3 of Y 2015, lower than 7% in 1-H of this year, the National Bureau of Statistics (NBS) announced Monday.
In the 1st 3 Q’s, GDP hit CNY 48.78-T (US$7.68-T, up 6.9% Y-Y. The service sector contributed more than 50% of GDP, according to the NBS.
This is the 1st time the Quarterly growth rate has dropped under 7% since Q-2 of Y 2009.
NBS spokesperson Sheng Laiyun said that global factors amid the world economic recovery had impacted on China.
“Expectation of a US interest rate hike prompted volatility in commodity prices, stocks and foreign currency markets. Many countries devaluated their currencies, putting more pressure on Chinese exports, one of the three pillars of China’s economic growth,” said Sheng at a press conference.
China’s exports growth dropped 7.9% Y-Y in the 1st 3 Quarters to CNY 17.87-T, according to the NBS.
Y-Y growth of China’s value-added industrial output in the frame stood at 6.2%, down from 6.3% in the 1st 8 months. Fixed-asset investment growth was 0.6 percentage point slower than the expansion for the 1st 8 months.
Despite disappointing growth in industrial output and fixed-asset investment, there have been positive signs in the Chinese economy.
Retail sales of consumer goods grew 10.9% Y-Y in September, higher than 10.8% for August, NBS data showed Monday. The figure marked the highest rate of growth since the beginning of this year.
Analyst Qu Hongbin predicted that consumption will continue to grow stably and that “backed by consumption growth and home sales recovery, a modest economic rebound may be realized in the coming months.”
“Both retail sales and property sales growth have been relatively strong,” though the economy is “not yet out of the woods,” being dragged by sluggish industrial production and fixed asset investment, said HSBC economist Julia Wang in a report to investors.
Services sector growth held up relatively well at the aggregate level, although the financial sector’s contribution fell compared with 1-H of Y 2015, according to the report.
“Overall, today’s data point to some signs of stabilization in the Chinese economy,” it said.
In the 1st3 Quarters, the value added of the service sector accounted for 51.4% of GDP, up 2.3 percentage points from the same frame last year, said the NBS.
The HSBC forecast another 25 bpts policy rate cut and 150 bpts reserve ratio cut in the remainder of Y 2015, adding that more policy easing should help generate a modest growth pickup in Q-4.
“China’s economic development is adjusting to the new normal and experiencing growing pains of shifting from old drivers of growth to new ones. Yet the fundamentals of a steadily growing economy have remained unchanged,” said Chinese President Xi Jinping in a written interview Sunday in advance of his state visit to Britain.
“The new type of industrialization, IT application, urbanization and agricultural modernization that is in full swing has generated strong domestic demand and great potential for future growth. It has also made the economy more resilient and adaptable. All this, coupled with deepening structural reforms, means that China will have very promising economic prospects.” Xi said.
China’s restructuring efforts also made a dent in the Hurun Rich List in Y 2015 released Thursday as more billionaires were made in emerging industries.
This wealth list showed that the Chinese Mainland added 242 USD billionaires in Y 2015, bringing its total to 596, which for the 1st time has outnumbered the 537 billionaires in the United States.
Technology was the fastestgrowing source of wealth, with a 43% increase over Y 2014 although manufacturing and real estate remain the largest sources of billionaires. Almost all self-made rich men and women under 40 anni made their money in IT, according to Hurun, which lists 5 such dollar billionaires.
By Han Yang
Paul Ebeling, Editor