BOFIT Viikkokatsaus / BOFIT Weekly 2019/43

The National Bureau of Statistics reports that GDP grew by 6 % y-o-y. The growth slowdown has been extremely even: down to 6.4 % in Q1 and 6.2 % in Q2. So, growth has remained within the official government target range of 6-6.5 % this year.

The role of fixed investment as an engine of growth has diminished. In the first nine months of the year, about a fifth of economic growth came from increased fixed investment. In the same period in 2018, fixed investment accounted for over a third of growth. The economic boost from rising consumer demand also waned. Consumer demand accounted for about 60 % of growth this year, down from 80 % in the same period last year. Growth in consumption of services grew faster than other forms of consumption. The NBS reported that services accounted for over half of household consumption demand. Net exports of goods and services have been a positive contributor to growth this year, accounting for about 20 % of first-half GDP growth.

Retail sales grew in the first nine months of this year by 6.4 % in real terms. Weakness in car sales slowed retail sales growth overall. Car sales account for roughly 10 % of retail sales of goods and services. The value of car sales in the official retail sales figures fell by 1 % in January-September. The China Association of Automobile Manufacturers (CAAM) reports that 10 % fewer cars were sold in January-September than in the same period last year. Industrial output growth revived in September, rising to 5.8 % y-o-y.