REPEAT:China Q3 GDP Stays Robust at 6.8% on Strong Ind. Output

Repeats Story Initially Transmitted at 04:27 GMT Oct 19/00:27 EST Oct 19

--Domestic Consumption Helps Buoy Growth

     BEIJING (MNI) - Real GDP in China totaled CNY21.08 trillion in the third

quarter of 2017, rising 6.8% year-on-year, slightly lower than the growth rate

of 6.9% in the first two quarters of the year, according to data released

Thursday by the National Bureau of Statistics (NBS).

     Real GDP grew 1.7% quarter-on-quarter, lower than the 1.8% growth rate

during the same period last year and also lower than the second quarter growth

rate of 1.8%. 

     Among major sectors: 

     -- The agricultural sector grew CNY1.92 trillion in the third quarter, up

3.9% year-on-year, compared with 4.0% year-on-year growth in the third quarter

of 2016 and 3.8% growth in the second quarter this year.

     -- The industrial sector grew CNY8.51 trillion in the third quarter, up

6.0% year-on-year, compared with 6.1% growth in the third quarter of last year

and 6.4% growth in the second quarter this year.

     -- The service sector saw CNY10.74 trillion growth in the third quarter for

a growth rate of 8.0% year-on-year, compared with 7.6% growth in the third

quarter of last year and 7.6% growth in the second quarter this year.

     Consumption has become the main driver of economic growth, as final

consumption expenditures contributing 64.5% to GDP growth, 2.8 percentage points

higher than the same period last year, the NBS said.

     Average per capita disposable incomes rose 7.5% in real terms in the first

three quarters of 2017, higher than the 6.3% gain in the first three quarters of

2016.

     "Generally speaking, the national economy has maintained the momentum of

steady and sound development in the first three quarters of 2017," the NBS said

in its report. "The conditions supporting medium to high economic growth and

enabling the economy to reach a medium to high GDP level keep accumulating, and

the inclusiveness and people's satisfaction with economic development improved

significantly, laying a solid foundation for achieving the annual GDP target and

better performance," the NBS said in its report.

     The government has set a growth target of around 6.5% for this year, which

should be achieved easily given that growth in the first three quarters of the

year stood at 6.9%. 

     "However, we must be aware that there are still many unstable and uncertain

factors abroad, and domestic economic conditions are still in a stage of

structural adjustment, so the foundations for a steady and sound economic

development need to be consolidated," the NBS warned.

     INDUSTRIAL PRODUCTION

     Industrial output rose 6.6% year-on-year in September, up from 6.1% growth

in September of last year. Industrial output in the third quarter increased

6.7%, up from 6.0% in the third quarter of last year but lower than the 6.9%

rise in the second quarter of 2017.

     Industrial production rose 0.56% m/m in September, the strongest m/m growth

rate since June (+0.81%). Output rose 0.45% m/m in August and 0.41% in July. 

     "There are three factors that contributed to the rise of the industrial

output growth rate in September," Guotai Junan Securities said on Thursday.

"First, export growth in September stimulated industrial production. Second, the

[government's] environmental supervision group ended its examinations in

mid-September and the expectations of industrial companies that their output

will be restricted this winter caused them to produce more in September while

they still can. Third, the mid-autumn festival last year and the G-20 meeting

last year caused some factories to produce less last September, resulting in a

[favorable] base effect."

     Mining sector output shrank 1.6% year-on-year in the first three quarters,

compared with a 0.4% contraction in the same period last year. 

     Manufacturing production grew 7.3% year-on-year in the first three

quarters, faster than the 6.9% year-on-year growth in the same period last year.

     Production in the electricity, heating, gas, and water sector rose 8.4%

year-on-year in the first three quarters, compared with growth of 4.3% in the

same period last year.

     Production in the high-tech sector grew 13.4% y/y in the first three

quarters, accelerating from 10.6% growth in the first three quarters last year.

Equipment production rose 11.6%, above the 9.1% growth rate of a year ago.

     CUTTING OVERCAPACITY AND DELEVERAGING

     Supply-side structural reforms made additional progress in the first three

quarters, the NBS said.

     The industrial capacity utilization rate in the first three quarters

reached 76.6%, higher than the 73.1% rate during the same period last year.

     Corporate debt leverage was also brought down, the NBS said.

     The debt-to-asset ratio of industrial enterprises above the designated size

was 55.7% at the end of August, 0.7 percentage point lower than the same period

last year.

--MNI Beijing Bureau; +86 10 85325998; email: he.wei@marketnews.com

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--MNI Beijing Bureau; +86 (10) 8532-5998; email: vince.morkri@marketnews.com