SHANGHAI – China's economy grew by 6% in the third quarter and landed right on the central government's gross domestic product target for the full year as business activity continues to decline in the world's No. 2 economy.
Growth across the board cooled in the third quarter, despite some recoveries in industrial production and retail at the end of the quarter, according to data released Friday by the National Bureau of Statistics.
But investment in fixed assets, a measure of construction activity that has long been an important economic driver, but is getting smaller, was weaker in the first nine months, up 5.4% from the previous year. This compares with a rate of 5.5% for the first eight months and was down from 5.8% growth announced after the first half of the year.
Investments in the agricultural, industrial and industrial sectors withdrew in September, while infrastructure investment accelerated ahead of the Communist Party's 70th year of power on October 1
Ding Shuang, an economist with Standard Chartered, said the pick-up in infrastructure investment is due to larger bond issues to fund projects launched by local government, though he said the September industrial production acceleration was likely due to the statistics bureau including previously lost data.
Chinese growth has been in a downward trajectory in recent years. Every quarterly slowdown in growth pulls economic development to new low levels that have not been seen since the current GDP target was set in 1992. The economy had poorer results in 1990, when China dropped out of the study at Tiananmen Square in 1989, which crippled investments.
The brake reported on Friday compares with a 6.2% growth rate posted in the second quarter – which economists said was driven by more lending – and a 6.4% figure in the first quarter, which helped by a tax cut in March worth 2 trillion yuan ($ 283 billion).
"Despite increased downward pressure on economic growth, key economic indicators remained in a reasonable range," said a spokesman for the Statistics Bureau, Mao Shengyong, citing steady employment and inflation, aside from energy and food prices.
The fourth quarter, Mr. Mao's forecast, would include "conditions and support" for the economy, including a less steep fall in car sales and industrial production, as well as stabilization of infrastructure investment.
Mr. Mao also cited apparent progress between US and Chinese traders as a positive factor, describing it as "a good thing for the markets and the global economy, including the Chinese economy."
Capital Economics Chinese economist Julian Evans-Pritchard wrote in a note that despite the stronger September figures, downward economic pressure is mounting.
"We expect monetary policy to be loosened for a long time in response, but it will take some time for this to put a floor under economic growth," says Mr. Evans-Pritchard wrote.
The quarterly figure was slightly lower than a median forecast of 6.1% growth in a poll of 13 economists by The Wall Street Journal. Beijing's target range for GDP growth of between 6.0% and 6.5% this year has expected a decline in earnings. The average for the first nine months is 6.2%.
Last year, the Chinese economy expanded 6.6%.
Friday's report showed that industrial production value in China rose 5.8% in September from a year earlier, accelerating from a 4.4% in August and better than a median 4.9% forecast for 15 economists surveyed by the Journal .
Retail sales rose 7.8% in September from a year earlier, and are in line with economists' expectations. That was a touch better than August's 7.5% increase.
The growth in construction activity of 5.4% was in line with the economists' median forecast.
Home sales by value for the period January to September increased 10.3% from the previous year, against a gain of 9.9% in the first eight months of the year. Investment in commercial real estate increased by 10.5% in the first nine months of the year, unchanged from the first eight months.
Construction starts were somewhat weaker, increasing by 8.6% from January to September from the previous year, compared with 8.9% in the first eight months of the year.
The government set the final consumption expenditure of 60.5% of GDP in the first nine months of the year, with investments of 19.8% and net exports of 19.6%.
Liyan Qi and Grace Zhu contributed to this article.
Write to James T. Areddy at email@example.com