The Chinese economy was back on the rise with an average growth rate of 8 percent for the year seeming more likely to be achieved following the last quarter results. The growth is said to have been aided by a combination of factors such as the surge in bank lending and breakneck investment.
The Chinese government further added that it is likely to carry on with the ultra-loose policies which have been in practice over the last one year. Analysts say that tightened policies are unlikely in the near future as figures are still not strong enough to encourage that. However, there has been a slow reduction in the stimulus level as private investment and consumption has been on the rise.
The year-on year growth rate of 8.9% in the last quarter was greater than the 7.9% and 6.1% rates achieved in the two previous quarters, April-June and Jan-March, respectively. China’s GDP grew by 7.7 percent in the first three quarters this year, and government sources say that the overall target of 8 percent average growth will be easily achieved which would help in keeping unemployment under control.
The ease with which the target of 8 percent growth is likely to be achieved shows the effectiveness of the government’s 4 trillion Yuan pump-priming package which energized investment and spending.
In a growth of 7.7 percent over the past three quarters, major contributors were capital spending with 7.3 percentage points and consumption with 4.0 percentage points, while net exports were responsible for a subtraction of 3.6 percentage points.
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