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China's economy slows down in third quarter

China's statistics agency has said that the economy slowed down in the third quarter of the year, posting 6.9 percent growth. However, domestic retail sales witnessed a steady rise, subduing a sharp economic downturn.

The

world's second-largest economy

reported on Monday its weakest quarterly growth since the 2008 global financial crisis, although consumer spending was stronger than projections.

China's economy grew by 6.9 percent in 2015's third quarter - July to September - marking its slowest growth since the first quarter of 2009, when the economy expanded by 6.2 percent.

"Continued downward pressures from real estate and exports caused gross domestic product (GDP) growth to drop to 6.9 percent," said Louis Kuijs, head of Asia economics at Oxford Economics in Hong Kong.

"But robust consumption and infrastructure prevented a sharper slowdown," Kuijs noted.

Lacking momentum?

However, growth was above median projections from economists and still in line with Beijing's "around 7 percent" annual target.

"In order to restructure, the economy will face some downward pressure," said spokesman for China's official National Bureau of Statistics (NBS) Sheng Laiyun in a statement.

"China does not lack growth momentum…Despite a slowdown in the industrial sector, China's services sector is growing rapidly," Laiyun added.

While GDP barely exceeded median projections, retail sales jumped

While GDP barely exceeded median projections, retail sales jumped

Consumer spending on the rise

While indicators showed

deceleration in industrial production,

which grew only 5.7 percent in September, retail sales - a strong indicator of consumer spending - displayed a steady rise in China's services sector with 10.9 percent growth in September.

With e-commerce, restaurants and other service-oriented platforms for domestic consumption employing 41.7 percent of the labor force, steady growth in the sector helped prop up the economy in the third quarter as manufacturing slumped.

"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," said Oliver Barron, a policy researcher at Beijing's NSBO, according to Reuters news agency.

State visit to UK

Chinese Premier Xi Jinping begins a four-night state visit to the UK on Monday. It is the first such trip in a decade - President Hu Jintao was the last premier to visit, in 2005. Xi and his wife are to stay at Buckingham Palace as guests of Queen Elizabeth.

Trade relations between the UK and China have been growing steadily for the last decade. China now represents the UK's sixth biggest export market. China is making significant investments in Britain - including in its infrastructure. A particularly controversial project is for the building of a nuclear power station - Hinkley Point C.

ls/jm (Reuters, AFP, AP)

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