China's economic growth declines to 6-year low

China's economic growth decelerated in the latest quarter but relatively robust spending by Chinese consumers helped to avert a deeper downturn.

The world's second-largest economy grew by 6.9 percent in the three months ended in September, the slowest since early 2009 in the aftermath of the global crisis, data showed Monday. That was down from the previous quarter's 7 percent.

Much of China's slowdown over the past five years is self-imposed as communist leaders try to steer the economy to more self-sustaining growth based on domestic consumption and service industry instead of trade and investment.

Sheng Laiyun, a spokesman for China’s National Bureau of Statistics said on Monday that the country would maintain stable growth in the future.

“All this indicates the restructuring and upgrading of the Chinese economy are going steadily,” said Sheng, a spokesman for the Chinese statistics agency. “The general condition of the Chinese economy remains strong.”

Earlier this month, the International Monetary Fund (IMF) said China’s growth slowdown could result in a hard landing and authorities should take steps to further open up the economy, adding that the task for Chinese leaders is not easy as they attempt a smooth transition following a run-up in credit and investment while allowing markets to play a bigger role in the economy.

Weakening trade and manufacturing have fueled concern about possible job losses and unrest. The communist government has cut interest rates five times since last November in an effort to shore up growth.

Consumer spending accelerated over the course of the quarter, helping to shore up the expansion. Growth in retail sales picked up from 10.5 percent in July to 10.9 percent in September. Spending on e-commerce grew by 36 percent in the third quarter over a year earlier.

“Continued downward pressures from real estate and exports caused GDP growth to drop,” said Louis Kuijs of Oxford Economics in a report. “But robust consumption and infrastructure prevented a sharper slowdown.”

“We think overall growth will soften more into 2016,” Kuijs said. “In such a setting we expect more incremental monetary and fiscal measures.”

Other September figures also released on Monday pointed to stubborn weakness in the Chinese economy. However, there is widespread skepticism about the reliability of official Chinese data. Some market watchers believe current growth is much weaker than government readings, though officials deny allegations that the numbers are inflated.

Factory output rose 5.7 percent in September from a year ago, missing forecasts for a 6 percent rise, and fixed-asset investment (FAI), a key driver of the economy, climbed 10.3 percent in the first nine months of the year, below estimates of 10.8 percent.

Retail spending alone bucked the trend, growing at an annual rate of 10.9 percent, slightly better than forecasts for 10.8 percent growth.

“The GDP beat is surprising,” said Oliver Barron, a China policy researcher at NSBO in Beijing.

“The data would suggest that retail sales is holding up the data and there are other areas that the government is factoring in consumption and services data that are not picked up in the monthly figures.”

Wire services