China's economic growth was missed for the first time in 3 years

The Chinese economy slowed down in September, according to data released by the National Bureau of Statistics (NBS).

The economy grew 6.5% from one year to the next, which is the weakest growth since the first quarter of 2009 – the depth of the financial crisis. The reading was lower at both the June print of 6.7% growth and the 6.6% that economists were hoping for.

The Chinese government is aiming for growth of about 6.5 percent for the 2018 calendar year.

In the September quarter, GDP grew by 1.6% on a seasonally adjusted basis, which is in line with expectations but lower than the 1.8% pace recorded for the quarter ending in June.

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According to the NBS, China's service-dominated tertiary sector grew by 7.7 percent year-on-year, exceeding the respective growth rates of 5.8 percent and 3.4 percent in the previous year. secondary (industrial) and primary industries during the same period.

As in the GDP report, monthly indicators of industrial production, retail sales and urban capital investment were mixed for September.

Compared to the previous year, industrial production grew by 5.8%, a level below the forecast level of 6% and at a rate of 6.1% recorded for the same year in August.

This is the slowest growth recorded since February 2016, another period in which the Chinese economy was under pressure, as was the case recently due to the impact of the growing trade war with the United States and previous deleveraging efforts across the corporate sector.

The production of coal, steel and steel products increased 5.2%, 7.5% and 9.8% respectively over the year, compared to 4.2%, 2.7% and 6.4%. % for the 12 months ended August. Cement production remained stable at 5% over one year.

Electricity production and crude oil refining slowed, rising by 4.6% and 4.9% respectively over the year, compared with 7.3% and 5.6% in August.

However, while industrial production was insufficient, news was better for retail sales, which rose 9.2% year-on-year, up from 9% in August. The markets were expecting sales growth to remain at 9%.

In September alone, retail sales rose 0.8%.

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Referring to recent attempts by Chinese policymakers to stimulate the economy, capital investment in urban areas grew by 5.4 percent in the first nine months of the year compared to the same period of time. the year before.

This was an acceleration of the annual rise of 5.3% observed between January and August. The pace of today should remain the same.

State-owned investments, which account for about 40 percent of total investment, grew by a 1.2 percent slowdown between January and September compared to the previous year, a slight improvement over the pace of growth. 1.1% recorded in August.

Investment in the Chinese industrial sector has been sharply accelerated, registering growth of 5.2% over the same period, a rate higher than the 4.3% recorded a month earlier.

According to the SNB, the value of real estate investments increased by 9.9% year-on-year (cumulative), which represents a deceleration from the annual rate of 10.1% recorded in the first eight months of the year. year.

The value of real estate sales increased by 13.3% year on year, against 14.5% between January and August.

Floor area under construction increased 3.9% year-over-year, which is higher than the 3.6% growth recorded in the first eight months of the year. Newly launched real estate investments increased by 16.1% year-on-year, up from 15.9% the previous month.

An NBS spokesman said the government will maintain economic growth despite the uncertainties created by the deterioration of the external environment. They said the government will monitor any employment impact of escalating trade tensions with the United States.

According to them, the government will be able to reach its growth target for 2018 and expects infrastructure investments to stabilize.

The reports sparked a negligible market reaction, with investors seemingly more interested in the performance of Chinese equities, which rebounded sharply after Wednesday's tumble, helped by a series of headlines suggesting that policymakers to reverse the recent sales pressure.