SHANGHAI — China’s third-quarter gross domestic product advanced 7.8 percent, outpacing the 7.5 growth registered in the previous quarter as the country’s new leadership ploughs forward with economic reforms aimed at creating more stable economic growth.
China’s economy grew 7.7 percent in the first nine months of the year, the National Bureau of Statistics said on Friday.
Faced with the reality that the country’s breakneck growth of the past, which was propelled by exports to the West and by heavy investment in real estate and infrastructure projects, is no longer sustainable, Beijing is moving forward with reforms that would result in a broad economic overhaul.
Other data released still indicates that reforms are slow going. Despite efforts to cool off the country’s over-heated property market, home sales jumped 34 percent in September compared to the previous month.
“GDP growth stabilized in the third quarter on stronger industrial and real estate sector activity,” William Adams, international economist for PNC Financial Services Group, said in a statement. “Real estate investment was moderate in the third quarter, but housing sales accelerated as prices rose rapidly, especially in China’s largest cities.”
Data released for September reflected a slight weakening of the economy could be underway. September industrial production growth slowed to 10.2 percent from August’s 10.4 percent expansion rate. September retail sales growth slowed slightly to 13.3 percent growth from 13.4 percent growth the month before.
“China continues to become a more difficult place to operate labor-intensive business,” Adams said, noting that average migrant worker salaries rose 13 percent in the first 9 months of 2013 compared to the year before. “Manufacturers in China are being squeezed between rising labor costs and prices that look stable in U.S. dollar terms but are actually falling when measured in the domestic currency.”
In July, Chinese officials announced a small-scale stimulus plan to ward off an economic slowdown that could result in widespread social instability, which is one of the primary concerns in Beijing. Taxes were cut for some small businesses while certain costs were reduced for exporting companies.
China began a pilot free-trade zone in Shanghai at the end of September that, with more business friendly regulations and relaxed capital flow rules, will serve as a testing ground for a significant upgrade of China’s economy, according to China’s commerce ministry.
Next month, Xi will preside over annual government meetings in Beijing that are expected to yield further plans for economic reforms.