One might expect slowing growth to be a cause for concern for Chinese authorities. In reality, Beijing will welcome the news that China’s economy grew by 9.6 per cent in the third quarter from a year earlier – down from 11.9 per cent in the first quarter and 10.3 per cent in the second – as a sign of much needed cooling.
China has been in danger of overheating since its crisis-induced fiscal stimulus kicked in last year. The first-quarter sprint was unsustainable. The latest figures confirm that the second quarter was not a one-off but part of a broader trend of deceleration.
Authorities will congratulate themselves on skilfully carving a middle way between overheating and stalling. Pre-emptive measures to restrict property speculation and curb lending – the central bank has raised the reserve ratio four times this year – have clearly helped. The wearing-off of stimulus measures has also contributed.