(Fixes typo in paragraph 15)
By Yawen Chen and Ryan Woo
BEIJING Oct 14 A mixed bag of Chinese economic
data this week has unnerved global markets and clouded the
outlook for China's economic growth, days before the release of
the country's quarterly gross domestic product figures.
Global markets rose on Friday after official data showed
China's factory output prices grew in September for the first
time in almost five years, but a day earlier, stocks in Europe
and on Wall Street were hammered by an unexpectedly poor Chinese
trade report for the same month.
Exports for September slumped 10 percent from a year
earlier, despite the yuan's depreciation in the past
year. Imports unexpectedly fell, after ticking higher in August,
raising questions over the resilience of domestic demand.
Though China's economy recorded its slowest growth in 25
years in 2015, it has shown signs of stabilising in recent
months, sustained by billions of dollars of government
infrastructure projects and a spreading credit-fuelled housing
boom. China is targeting gross domestic product growth of 6.5 to
7 percent this year, after 6.9 percent last year.
"The government has been able to stabilise the economy this
year with quite a lot of stimulus, but it hasn't actually been
as effective as a lot of people had expected," said Julian
Evans-Pritchard, a Singapore-based China Economist at Capital
The booming property market is showing tentative signs of
cooling after some local governments rolled out restrictions on
home purchases to temper a months-long buying
Chinese companies are still sitting on $18 trillion in debt,
equivalent to about 169 percent of GDP, according to the most
recent figures from the Bank for International Settlements.
Fixed asset investment is hovering near 17-year lows, while
private investment is still languishing at record lows.
In a Reuters poll, 58 economists estimated that
third-quarter GDP, due on Oct. 19, expanded 6.7 percent, as it
did in the first and second quarters.
Despite fresh signs of softer economic conditions, most
economists think Beijing will meet its official GDP target
without much difficulty.
The producer price index (PPI) rose 0.1 percent in September
from a year earlier, the National Bureau of Statistics said on
Friday, the first expansion on an annual basis since January
But for a more realistic gauge of China's economy,
economists tend to look at variables beyond official numbers.
"We tend to focus on less high-profile, volume-based
indicators, which don't have to be deflated with price indices,
such as freight volume, passenger traffic, floors under
construction, among other measures," Evans-Pritchard said.
He said the official GDP hasn't been a reliable indicator of
what's happening on the ground since 2012, the first year
China's GDP target came under threat.
"What's really interesting about those data is that they
used to move very closely with GDP, and from around 2012 onwards
most of our indicators continued to slow, but the official GDP
(figures) were just kind of moving within a tiny range."
Evans-Pritchard's official 2016 official GDP estimate
remains at 6.8 percent. But based on other variables, he said he
believed growth was likely to be 5 percent.
Data for September's bank loans is due over the next few
days. Bank lending more than doubled in August from the previous
month, fuelled by strong mortgage demand.
Zhou Hao, senior economist at Commerzbank in Singapore, said
to gauge real growth in China is "a complicated story", but he
tends to look at the debt data that comes out of China for
China unveiled guidelines this week to cut rising levels of
corporate debt that some analysts fear could destabilise the
world's second-largest economy.
The government aims to stabilise and reduce corporate debt
levels in the near- and medium-term.
(Reporting by Yawen Chen and Ryan Woo; Editing by Will