Economists and market-watchers reacted with cautious but firm optimism to the much-anticipated release of China's quarterly GDP numbers Wednesday night, as headline year-on-year growth statistics met expectations and other indicators painted an improving picture of the powerhouse Chinese economy.
The consensus view was that, in spite of the fact yearly numbers showed a slowdown in previous growth rates -- the seventh consecutive time growth numbers have been lower than the last time around -- the employment, consumption and industrial production picture suggested the momentum was turning, and China's economy might see a "soft landing" after all.
According to government statistics, one-year GDP growth as far as the quarter ended in September fell to 7.4 percent for that reporting period, less than the 7.6 percent growth reported after the second quarter of 2012. The drop was mainly due to revisions in months earlier than the last quarter, as annualized growth for the July-September period actually accelerated to 9.1 percent, from 8.2 in the April-June time-frame.
Hong Kong-based economists for Spanish bank BBVA noted the figures raised "confidence that the slowdown in growth momentum has probably bottomed out."
The month-to-month numbers further showed the turnaround -- with growth stabilizing and perhaps inching higher a few fractions of a percentage at a time -- was already occurring, according to Sun Junwei, a China-based economist for British HSBC. In a note, the analyst wrote about how "September's improvement is faster and stronger than expected, implying that the recent acceleration of policy easing -- both the approval of infrastructure projects and the improving liquidity conditions -- is feeding through to generate new demand."
Digging deeper into the numbers, analysts at Australian investment bank Westpac wrote the spike in the annualized quarterly growth rate ""now resembles a shallow “V” with the second arm one-third drawn." Those analysts explained how the data showed "progress has already been made" regarding the industrial oversupply issue many pessimists on the Chinese economy highlighted earlier this year. And they even went as far as declaring the data indicated a "nascent sales rebound," primed by domestic consumption, that would have been even more solid were it not for the fact car sales in China were hit by a nationalistic boycott of Japanese brand dealerships.
Not everyone was as upbeat on the numbers.
Wei Yao, a China-based economist for French Societe Generale, said that, while he agreed with the consensus "bottoming-out" theory, "the recovery has been uneven and narrow-based so far," with most of the growth seen in government-supported infrastructure development even as housing and industrial data, in his opinion, lagged.
There's also the fact that, as even the government has pointed out in the past, the Chinese economic statistics are highly manipulated, which some experts were saying became apparent in the latest data dump.
Mark Williams, the chief Asia economist for London-based Capital Economics, wrote in a note that "it is hard to square the q/q growth figures with published y/y growth. Simply compounding the last four quarters’ q/q growth rates implies that output increased 7.6% y/y last quarter rather than the official 7.4%."
Pseudonymous blogger Zarahustra, who runs the highly-influential -- and usually downbeat on China -- economics blog Also Sprach Analyst, additionally noted some proxy measures of Chinese economic growth were simply pointing in a different direction as the official numbers.
"Electricity consumption/production data ... suggests that even though you can say a lot about China shifting towards services and China suddenly become much more energy efficient, one would still question why growth is not a bit lower," he wrote on a blog post.
The financial markets, however, were unabashedly positive on the results.
The benchmark Shanghai Stock Exchange composite index closed up 1.24 percent for the day, while Hong Kong's Hang Seng Index was up 0.48 percent.
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