Downturn slows growth in China as economic pain intensifies further

The world’s second-largest economy grew by 7.4 per cent in the three months ending in September, below the Communist Party’s 7.5 per cent target for the full year, data showed yesterday.

That was down from the previous quarter’s 7.6 per cent and the lowest since the first quarter of 2009 in the midst of the global crisis.

In a sign of an emerging recovery, economic activity in the latest quarter was up by 2.2 per cent from the previous three month period, the biggest quarter-on-quarter gain in a year, said Dariusz Kowalczyk, senior economist for Credit Agricole CIB in Hong Kong.

“This confirms that the economy is rebounding from the trough in the first quarter of this year,” Mr Kowalczyk said. “There is no room and no need for further major stimulus.”

Beijing has cut interest rates twice since early June and is injecting money into the economy through high investment by state companies and spending on building subways and other public works.

But authorities have avoided launching a massive stimulus after huge spending in response to the 2008 global crisis fuelled inflation and a wasteful building boom when retail sales rose 14.4 per cent, accelerating from the 14.1 per cent rate for the first half of the year.