21 October 2010 06:29 [Source: ICIS news]
By Fanny Zhang
The annual GDP growth had steadily slackened its pace from the 10.3% clip recorded in the second quarter and the 11.9% rate of expansion registered in the first quarter, data from the National Bureau of Statistics (NBS) showed, as the government introduced measures to curb lending and to cool down its property market.
“The decline on growth in the third quarter could be partially blamed on the big base last year,” said Yang Wei, senior analyst at Shanghai-based broker Guotai Junan Securities (GTJA), adding that growth in the fourth quarter would further slow at around 9.0%.
But the excess funds in its financial system were creating strong inflationary pressures.
Rising inflation, partly being fuelled by spikes in property prices, had prompted the surprise interest rate hike by the People’s Bank of China (PBoC) on Tuesday night, analysts said.
Meanwhile, wholesale prices, as measured by producer price index (PPI), increased 4.3% year on year in September, based on the data.
The nine-month average inflation represented a sharp reversal of the 0.7% average decline in consumer prices for the whole of 2009, based on official data.
China's manufacturing sector, meanwhile, logged a 16.3% year-on-year growth in the first nine months of the year, 7.6 percentage points higher compared to the same period last year, based NBS data.
The Chinese economy remained in good shape and would overperform its western counterparts, even with expectations that growth would further decelerate, analysts said.
“The upward trend would continue, just that structural adjustments would be made in pursuit of higher quality on growth,” said Yang of Guotai Junan Securities.
Over the next five years,
“The weight of real estate and automobile [industries] in the overall economy would be reduced, but their absolute consumption volumes would still rise,” said Qiu Ziyuan, chief analyst at Shenzhen-based broker China Merchants Securities (CMS).
The strength of the sector continued on to this year, with expectations that passenger car sales would exceed 13m units for the whole of 2010, based on data from the China Association of Automobile Manufacturers (CAAM).
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