By tf-lawyer.com On October 18th, the National Bureau of Statistics of China announced that the country’s GDP grew by 4.8% year-on-year in the first three quarters. Despite a slight fluctuation in economic performance after a 5.3% growth in the first quarter, there were signs of stabilization and improvement by September, with various indicators related to production, demand, and expectations showing marginal enhancements. This raises the question: what sparked this shift in September?
According to Sheng Laiyun, deputy director of the National Bureau of Statistics, significant policy effects, especially following the Central Political Bureau meeting in late September, accelerated the release of a comprehensive set of growth-enhancing measures. These policies have considerably boosted market confidence, improved societal expectations, and invigorated market dynamics.
Newly released data reveals promising trends in both industrial and service sectors. In September, the year-on-year growth of industrial added value for enterprises above a designated size increased by 5.4%, marking a 0.9 percentage point acceleration from August. This is notable as it halted four consecutive months of decline in industrial growth. Similarly, the service production index rose by 5.1%, up by 0.5 percentage points from August.
Yang Daoling, Director of Big Data Analysis at the China Information Center, noted that bidding data showed a 5.8% year-on-year increase in projects related to enterprise capacity expansion in the third quarter, with September alone witnessing a remarkable 28.4% year-on-year growth—the highest rate this year. This suggests a clear resurgence in the appetite for business expansion among companies.
On the demand side, improvements were also evident. Retail sales of consumer goods rose by 3.2% year-on-year in September, accelerating by 1.1 percentage points compared to August. From January to September, fixed asset investment growth was steady at 3.4% year-on-year, signaling a stabilization following several months of decline.
Guo Liyan, the deputy director of the Economic Research Institute at the Chinese Academy of Macroeconomic Research, pointed out that sales of home appliances and audiovisual equipment in designated major retailers surged over 20% year-on-year in September. This trend aligns with current subsidy policies aimed at encouraging upgrades of large-scale consumer goods, indicating that initiatives focused on “two new”—upgrading equipment and replacing old consumer goods—are gaining traction.
These positive changes have led to an uptick in market expectations and activity. In September, a survey of 100,000 large enterprises indicated that the proportion of industrial firms expecting an optimistic business outlook for the fourth quarter rose by 1.3 percentage points from the previous month and 0.9 percentage points year-on-year. Confidence in the capital and real estate markets has also been bolstered, with stock trading volumes on the Shanghai and Shenzhen exchanges shifting from a year-on-year decline of 15.3% in August to a 32.7% increase in September. Additionally, the year-on-year decline in the real estate production index has narrowed for five consecutive months.
As we move into the fourth quarter, analysts are generally optimistic that the combined impact of effective existing policies and new growth-oriented measures will continue to enhance driving forces behind economic recovery toward the year’s end.
Wen Bin, chief economist at China Minsheng Bank, remarked that with the support of these policies, industries across the board have seen rebounds in production, service growth, and consumption rates in September, alongside stabilized investment growth and improved employment conditions. Since October began, positive shifts have been observed in the real estate, capital, and consumer markets. With policies continually being strengthened and yielding visible effects, the fourth quarter is expected to sustain this recovery momentum.
Guo Liyan emphasized that the suite of stimulating policies is favorable for bolstering confidence in the real estate and capital markets, while also significantly promoting structural optimization and improvement across various aspects of the economy and society. She is optimistic that the benefits of these policies will persist into the fourth quarter and next year, thereby enhancing the business environment, improving efficiency, and strengthening expectations for various operating entities, ultimately laying a solid foundation for stabilizing macroeconomic growth and optimizing the national economic structure.
