More good news from China as the recovery gathers pace.
In fact, the rebound in the economy, thanks to the $US585 billion stimulus package, is maturing well, with growth in the third quarter rising to an annual rate of 8.9% (about what was tipped by the markets), from 7.9% for the June quarter and 6.1% for the March three months.
For the first nine months of the year, growth averaged an annual 7.7%, which puts it on track for the 8% target of the Government. The figures were posted on the National Statistics Bureau’s website at 1 pm today, Australian eastern daylight time.
The news of the stronger growth came after a series of upgrades in recent weeks, thanks to stronger investment, bank lending, car sales and an improving trade picture.
Get Crikey FREE to your inbox every weekday morning with the Crikey Worm.
New loans made by China’s banks in September topped the 500-billion-yuan mark and were around 100 billion yuan more than August, according to China’s central bank.
Banks loaned 516.7 billion yuan in September (around $US75 billion), up from 410.4 billion yuan in August. Bank lending in the first nine months totalled 8.67 trillion yuan, far exceeding the government’s initial target of 5 trillion yuan for the year.
That’s sent property prices for new homes up 2.8% in the year to September and 3.8% for existing homes. The higher lending helped finance the continuing surge in Chinese car production and sales which were both up by close to 80% for the month. China actually produced its 10 millionth car for 2009 earlier this month.
China’s export volume were down 15.2% in September from a year ago, and imports were 3.5% lower.
But that was far better than August. Accounting for different numbers of business days in the month, exports rose from August by around 6% and imports rose by more than 8%, with iron ore imports topping a record 64.5 million tonnes and copper up 23%.
China’s foreign trade volume in the first nine months this year totalled $US1.56 trillion, down 20.9% from the first nine months of 2008.
Exports were down 21.3% at $US846.7 billion, and imports fell 20.4% to $US711.2 billion. Both represent an improvement on previous months as export volumes rise slowly and imports rise more faster.
China’s foreign reserves, already the world’s largest, hit a record high $US2.273 trillion by the end of September as surging asset prices and the economic recovery attracted investment into the country. This was up 19.2% on a year ago.
The People’s Bank of China said in a report that the reserves rose about $US141 billion between July and September, from $US2.13 trillion at the end of June.
The central bank said China’s foreign exchange reserve added by $US43 billion in July, $US36.2 billion in August and $US61.8 billion in September.
Given that China’s trade surplus fell to $US12.9 billion in September, compared with $US15.7 billion in August, the rise in the reserves in the same months points to continuing big inflows of so-called ‘hot capital’ or money spirited into the country via smuggling, or more likely through over pricing of exports. There were media reports this week of ‘experts’ warning about the increasing inflow of ‘hot money’
At the end of June, China’s foreign exchange reserve surpassed $US2 trillion for the first time.