Some analysts were disappointed by the reading, because flat growth figures aren’t all that impressive considering the size of China’s economy and the government’s propensity for padding numbers as much as possible. From Bloomberg:
“It’s amazing what a housing bubble and crazy debt increases can achieve,” said Michael Every, head of financial markets research at Rabobank in Hong Kong. “This is not sustainable – but then the alternative is nothing anyone wants to think about.”
Releases for September showed the continuing shift in China’s economy toward consumer spending, with retail sales gains outpacing the rise in industrial production. Investment spending continues to be led by the public sector, the figures showed, with subdued private business spending highlighting the problem of high levels of debt.
Here’s the breakdown of China’s key data points from last quarter:
While much of the rest of the world remains mired in subpar GDP expansion, China remains on track to hit its 2016 goal of 6.5% to 7% growth, largely due to government intervention in the finance, retail, and real estate markets.
The iShares FTSE/Xinhua China 25 Index ETF (NYSE:FXI) fell $0.09 (-0.24%) to $37.77 per share in premarket trading Wednesday. Year-to-date, the largest ETF focused on Chinese equities has gained 7.28%.