Supply-side reforms should continue, think tank says
China's economy is expected to grow at an annual rate of 6.6 percent in the fourth quarter and post overall growth of 6.7 percent for the full year, said two reports released this week.
Credit Suisse adjusted its forecast for China's economic growth in the fourth quarter higher to 6.6 percent year-on-year, compared with 6.5 percent previously, news portal sina.com reported on Wednesday.
Credit Suisse's adjustment came a day after the Chinese Academy of Social Sciences (CASS) said that third-quarter growth exceeded expectations and, while the economy will face further downward pressure in the coming quarter, it could post growth of 6.6 percent.
Official GDP data for third quarter has yet to be released, but the CASS forecast a growth rate of 6.7 percent.
Given the forecasts for the fourth quarter, the GDP growth rate for 2016 would be 6.7 percent, in line with the government's full-year forecasts of 6.5 percent to 7 percent growth.
"Economic growth in the fourth quarter is likely to fall slightly but within a normal and stable range," Wang Hongju, a senior research fellow at the CASS said on Wednesday, according to the Xinhua News Agency.
However, China's economy might have been less healthy in the third quarter than a recent spate of upbeat data suggest, with growth coming exclusively from manufacturing and property while the services and retail sectors faltered, Reuters reported on Wednesday, citing a survey from China Beige Book International (CBB).
Manufacturing posted its fastest expansion nationally, with 53 percent of companies seeing revenue gains, up 3 percentage points from a year earlier, the quarterly survey of more than 3,100 companies by CBB showed.
While a government infrastructure building spree and housing boom have given a much-needed boost to "old economy" companies from steel mills to cement makers, CBB noted foreign orders had also improved.
But "new economy" sectors such as services, transportation and retail showed weakness both quarter-on-quarter and year-on-year, with cash flow and profits deteriorating, leaving the country on uneven footing, the survey said.
The CASS also said fourth-quarter growth would be affected by the government-directed reduction of excess capacity and debt, while traditionally strong growth drivers such as infrastructure, property and private investment faced downward pressure.
"We should, as long as there's stable local demand, continue supply-side reform, strengthen the sustainability of economic development, and resolve hidden risks in the economy to keep the economy going at a reasonable pace," Wang said.
