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Beijing (AFP) Oct 18, 2012
China's economic growth eased for the seventh straight quarter, data showed Thursday, but analysts say the slowdown has almost bottomed out, just as the ruling Communist Party prepares for a pivotal meeting.
The 7.4 percent expansion in the three months to the end of September was the weakest since the first quarter of 2009 as persistent problems in key export markets in Europe and the United States continued to hurt the economy.
The economy grew 7.6 percent in the previous quarter.
However, positive indicators for September were seized upon as signs that the economy is bottoming out and that growth could pick up again in the next three months, reducing the need for any major stimulus.
National Bureau of Statistics spokesman Sheng Laiyun told reporters "signs that the national economy is stabilising are clearer".
He added: "The main indicators showed that although growth still slowed, the pace of the decline slowed and some indicators even increased at a faster speed."
A day earlier, state media quoted Premier Wen Jiabao saying the economy began stabilising over the past three months and should meet Beijing's 2012 goal of 7.5 percent growth.
The third-quarter result lowered growth for the first nine months to 7.7 percent, but Sheng reiterated Wen's comments, saying China was "fully confident" of hitting its target, although he added the economy still faced "uncertainties".
He also said a "mild rebound" was possible in the fourth quarter, a view echoed by some analysts.
"Basically it's obvious that the economy is bottoming out, and economic growth will likely be higher in the fourth quarter than the third quarter," said Lu Ting, Hong Kong-based China economist for Bank of America Merrill Lynch.
September data also released Thursday by the statistics bureau showed industrial production rose 9.2 percent year-on-year in September, from 8.9 percent in August.
Retail sales, meanwhile, rose 14.2 percent, from August's 13.2 percent, and fixed-asset investments, a key measure of government spending on infrastructure, gained 20.5 percent in January-September. The eight-month figure unveiled in August was 20.2 percent.
Shanghai's composite stock index closed 1.24 percent higher after the news.
Data on Saturday showed exports rose 9.9 percent in September year-on-year to a record monthly high, while imports increased after having contracted the month before.
Economist Alistair Thornton of IHS Global Insight cautioned, however, that a return to solid growth could still be some way off.
"The picture is one of emerging stabilisation, not the return of unbridled optimism," he wrote in a research report on the economic figures.
China's economy grew an annual average of more than 10 percent in the decade through 2010 but has slowed since early last year on broader global woes.
Government efforts to curb an overheated property market also have blamed for dampening demand in related sectors.
The business climate index, a gauge of corporate sentiment, fell 4.1 points to 122.8 in the third quarter from the second due to weakening external demand and overcapacity within the country, the NBS said later Thursday.
A reading above 100 means companies are optimistic about the economy while anything below 100 reflects pessimism.
Authorities have tried to bolster the economy this year by cutting interest rates twice and loosening other monetary policies, but with little success.
But China-watchers said the latest numbers should temper calls for any major stimulus.
Analysts have previously said such a package looked unlikely due to problems blamed on a previous stimulus programme in the wake of the 2008 financial crisis, particularly inflation.
The figures come just weeks ahead of a sensitive Communist Party congress that opens on November 8 and will select a new slate of leaders to take control of the world's number two economy for the next 10 years.
However, political analysts believe bold policy steps were unlikely before then.
"The leadership transition could be high on drama, but the short- and medium-term economic impact will be minimal," Alaistair Chan, an economist with Moody's Analytics, said in a report.
Authorities will, however, need to maintain loose monetary policies and could further cut rates and bank reserve requirements to boost lending, said Li Huiyong, an economist at Shenyin Wanguo Securities in Shanghai.
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