The Chinese economy slipped below 7 per cent growth in the third quarter, its lowest rate of expansion since the global financial crisis.
The country’s gross domestic product grew 6.9 per cent, lower than the 7 per cent growth achieved in the first two quarters, but still better than the 6.8 per cent growth analysts were expecting.
The figure, which some economists believe is overstated, comes ahead of the arrival in London today of China’s president and Communist Party leader, Xi Jinping.
His state visit, the first by a Chinese leader for a decade, will focus on encouraging Chinese investment into the UK and expanding yuan trading in London.
The GDP figure is likely confirm investors’ worries that the Chinese economy is suffering a slowdown since a stock market plunge over the summer and the surprise devaluation of the yuan in July and August.
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Alongside the GDP figure, the world’s second biggest economy also revealed that growth in its manufacturing sector had slowed more than expected to 5.7 per cent, compared with a rise of 6.1 per cent last month. The pace of growth was the slowest since 2008.
Fixed asset investment growth also disappointed, coming in at 10.3 per cent year-on-year, down from 10.9 per cent in August and the slowest pace of growth since 2000.
However, retail sales rose to a higher-than-expected growth rate of 10.9 per cent, while the services sector grew to 8.4 per cent in the third quarter, suggesting China is moving from its industrial base to a more services-led economy.
“Continued downward pressures from real estate and exports caused GDP growth to drop,” said Louis Kuijs of Oxford Economics in a note. “But robust consumption and infrastructure prevented a sharper slowdown.”
Yet the slower growth for the industrial sector and fixed-asset investment led some analysts to question the truth of the latest GDP figure.
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These figures “need to be taken with a grain of salt as official GDP growth appears to have become a poor gauge of the performance of China’s economy,” said Julian Evans-Pritchard, a Singapore-based economist at Capital Economics.
“Today’s data suggest that while the official GDP figures continue to overstate the actual pace of growth in China by a significant margin, underlying conditions are subdued but stable,” he wrote.
“Looking ahead, our view continues to be that stronger fiscal spending and more rapid credit growth will limit the downside risks to growth over the coming quarters.”
Beijing has set a 2015 GDP growth target of “about 7 per cent”, compared with the 7.3 per cent full-year growth recorded in 2014.
Sheng Laiyun, a spokesman for China’s statistics agency, said the latest figure showed only a “slight slowdown”, but President Xi told Reuters on Sunday that as an economy “closely linked to international markets”, China “cannot stay immune to the lacklustre performance of the global economy.”
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“We do have concerns about the Chinese economy, and we are working hard to address them,” the Chinese president said.
Separate data released today showed China’s government spending jumped 27 per cent in September from a year ago as the state increases spending on infrastructure to shore up growth.
The Shanghai Composite initially made modest gains following the release of the GDP figure in Beijing, but failed to hold, closing down 0.11 per cent to 3,8945.