As China’s National Statistics Office announced today, the Chinese economy grew in the third quarter by 7.8% on a year earlier. Second-quarter growth had stood at 7.5%. The pickup in momentum had already started to emerge in the preceding months. Industrial production in the third quarter was around 10% up on a year earlier, slightly topping the previous quarter’s figure. Soft indicators such as the purchasing managers’ index for the manufacturing sector suggest that the Chinese economy will more or less maintain the present momentum in the fourth quarter as well. This means that our current forecast of 7.6% growth this year could be slightly exceeded.
We believe that not too much should be read into the latest modest pickup. Since the beginning of 2012 Chinese GDP growth has been fluctuating chiefly in a narrow range between 7.5% and 8%. In our view, the fact that growth is successfully being kept relatively stable, despite the awkward global economic backdrop and the radical changes the Chinese growth model is currently undergoing, is far more important than whether the latest growth rate is 0.3 percentage points higher or lower than in the preceding quarter.