China’s economy performed better than expected in the third quarter and the country’s debt risks are under control, Premier Li Keqiang said on Tuesday.
"China’s economy in the third quarter not only extended growth momentum in the first half but showed many positive changes," Li said in the speech in Macau that was broadcast live on state television.
Key indicators such as factory output, company profits and investment have rebounded, he said, ahead of China’s release of third-quarter gross domestic product (GDP) data on Oct. 19.
More than 10 million new urban jobs were created in the first nine months, with the survey-based jobless rate falling below 5 percent in September, he said, while acknowledging that the economy still faces downward pressure.
China will be able to achieve its main economic targets this year and maintain medium- to high-speed growth, he said.
The government is aiming for annual economic growth of 6.5-7 percent in 2016, compared with 6.9 percent in 2015, the slowest expansion in a quarter of a century.
Despite a rocky start to the year and stubbornly weak exports, China’s economy grew 6.7 percent in the first half, buoyed by higher government infrastructure spending and a housing market frenzy which is beginning to raise fears of overheating. HSBC expects a similar rate of expansion in third quarter.
Wall Street Journal survey economists and they are concerned about China’s housing bubble
Stimulus measures appear to have stabilized China’s economy over the past few months, but the government now faces a resulting housing bubble that it needs to contain without choking off growth, economists say.
Both consumer and industrial prices seem to be gaining strength. The consumer price index likely rose 1.7% from a year earlier, quickening from a 1.3% year-over-year growth in August, the survey showed. Many economists polled expect China’s prolonged industrial deflation may finally come to an end this year. The country’s trade surplus likely remained sizable, helping to offset impact from capital outflows.