China’s economy cools but remains strong

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By Chris Oliver, MarketWatch

HONG KONG (MarketWatch) — China’s economic growth cooled in the third quarter, while September consumer prices rose at their strongest pace in nearly two years, but analysts said there were few signs of a “double-dip” slowdown.

The economy grew 9.6% in the third quarter from a year earlier, easing from a 10.3% expansion in the second, the National Bureau of Statistics said Thursday. The rise outpaced consensus forecasts for an expansion of 9.5%, according to a poll by Dow Jones Newswires, though many of these forecasts were nudged up recently from 9.3%.

Analysts said that while gross domestic product growth was cooler than that of the previous quarter, the data series was now starting to suffer from comparison to the rapid economic recovery of a year ago, making the latest numbers look small in comparison.

“Most investors understand base effect and have priced in such a ‘slowdown,’ so the fall of year-on-year growth is not bearish,” said Bank of America-Merrill Lynch analysts in a note following the data release.

Merrill said that the data weren’t pointing to a double-dip, as the economy expanded 9% to 9.2% on a quarter-on-quarter basis, according to its calculations. The Statistics Bureau doesn’t release quarter-on-quarter growth data.