The economic growth in China slowed to a low of five-years of 7.3% during the third quarter, which raised concerns of a runoff effect on the world economy but falling nearly in line with the leader’s plans in China for a controlled slowdown.
The figures from the third quarter were released on Tuesday and put China on track for annual growth of just less than 7.5%, which was targeted by the country’s leaders. Although they indicate there is room to wiggle in the plan.
The No. 2 economy in the world grew by 7.5% compared to last year in the same quarter.
The country’s Communist leaders have attempted to steer the country toward growth that is based on consumption domestically instead of being over-reliant on investment and trade.
However, the slowdown comes with a risk of dangerous job losses and China’s policymakers boosted growth during the second quarter through mini measures of stimulus.
Employment nonetheless remained strong during the third quarter and the service industries like retailing that the leaders want to push have performed well in 2014 even despite the economy turning downward.
If further slowdown takes place in the economy in China it would likely create some damage to the economy in the U.S., which remains the world’s largest and in commodity producers like Indonesia, Brazil and Australia, which have become accustomed to demand from China that has been strong.
One analyst believes that for each 1% drop in the economic growth in China it shaves as much as 0.2% from the annual growth in the U.S., which is the same effect of an increase of $20 per barrel in the price of oil.
Still, the figure for the third quarter was better than expected by a number of economists who had the figure at 7.2% or even lower.
Asian financial markets took the latest data in stride, ending Tuesday with unspectacular losses or gains.
China’s growth of its industrial production was mainly stable with a rate of 8.5% year to year during this year’s first three quarters. Investment in real estate, factories and other types of fixed assets were up 16% year to year.
However, investment in real estate lagged at a growth of 12.5% during the first 9 months of this year because of controls imposed by the government to curb housing costs.
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