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Business / Economy

Chinese economy to pick up in Q4

(Xinhua) Updated: 2014-10-13 10:17

BEIJING -- Despite signs of cooling in the Chinese economy, observers believe it has the resilience to pick up pace in Q4, supported by fiscal and monetary policy and an improving export outlook.

Lian Ping, chief economist with the Bank of Communications (BOCOM), has forecast 7.4 percent expansion in Q4, stabilizing the whole year's growth at around the same rate.

September's indicators and Q3 GDP are released later this month. A number of private economists have marked down Q3 prospects.

Wang Tao, chief China economist with UBS, reckons third quarter GDP growth will slide to 7.1 percent. Lian predicts 7.3 percent, with a sharp decline in property investment pulling down total investment and the whole economy along with it.

The other side of the coin is increasing exports and supportive fiscal and monetary policy, leading to a widespread view that the fourth quarter may outshine the third.

There is still ample wiggle room in fiscal policy to tackle any unexpected slowdown, and more fiscal expenditure could stabilize industrial production, Lian noted.

"It is very likely that exports will improve in coming months before the Christmas shopping spree against the backdrop of economic recoveries of some developed countries including the United States," said Chen Zhongtao, an analyst with the China Logistics Information Center.

Q4 export growth may be quite strong on the back of growing demand abroad, BOCOM economists echoed in a recent report.

With home prices and sales on the slide in many cities, the government announced an easing of mortgage rules to expand the pool of potential home buyers and the amount they can borrow. Second home buyers who have fully repaid previous loans now have the same status as first-time buyers.

The revival of cement and other industries through infrastructure projects may help growth in Q4, according to Cai Jin, deputy head of the China Federation of Logistics and Purchasing.

The mortgage rule changes may help demand and the central bank is working to reduce borrowing costs for businesses, both of which could buttress growth in coming months, analysts with CITIC Securities said in a report.

The property sector is going through a tough readjustment that will probably last for one or two years. A new growth engine must be found to replace real estate, Li Daokui, professor at Tsinghua University, cautioned on Sunday.

Chinese economy to pick up in Q4

Chinese economy to pick up in Q4

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