China's economy slowed further in the third quarter of the year, growing 6.9 per cent, the weakest rate since the start of the global financial crisis. The data puts pressure on the government to announce more stimulus measures in order to reach the official targeted growth rate of about seven per cent for the year.
"Overall it’s pretty disappointing," Société Générale economist Klaus Baader, told the Wall Street Journal. "Investment continued to slow pretty sharply despite efforts by the government to support the economy. It doesn’t seem to be sufficient."
While the country grew at its weakest pace since the global financial crisis, it fared better than market expectations. A growth of 6.8 per cent had been forecast by analysts.
The economic data reassured investors that the government stimulus was having a positive impact.
Speaking in Beijing today (October 19th) Premier Li Keqiang said "even though it was 6.9 per cent, it is still a growth rate of around seven per cent". He said employment had improved and that innovation was helping the country restructure its economy.
Service sector expected to grow
"In order to restructure, the economy will face some downward pressure," Sheng Laiyun, a spokesman for the Chinese statistics agency, told the BBC.
But despite a slowdown in the industrial sector, Mr Sheng said the services sector is expected to grow rapidly. "All this indicates the restructuring and upgrading of the Chinese economy are going steadily."
The growth data comes as China's imports fell more than analysts expected last month. They dropped 20.4 per cent from a year earlier to $145.2 billion (£95.4 billion) due to lower commodity prices and weaker domestic demand, according to the Chinese authorities.
However, exports contracted less than expected. Chinese goods to foreign markets fell 3.7 per cent, up from August's 13.8 per cent contraction.
China has recently revised down its growth rate for 2014 to its weakest pace in a quarter of a century, from 7.4 per cent to 7.3 per cent.
The country is transitioning from an exporting nation to an economy based more on services and spending by Chinese consumers. This leads to slower growth in Chinese demand for commodities, especially energy and industrial raw materials.
The World Bank has revised down its growth forecast for China for 2015 and 2016. It now expects growth in the country to be 6.9 per cent this year and 6.7 per cent next year, down from an earlier forecast of 7.1 per cent and seven per cent respectively.
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