(MENAFN- Khaleej Times) China's economy will probably rebound in the fourth quarter, Jia Kang, a Ministry of Finance researcher, said at a conference reviewing China's economic performance in Beijing on Saturday.
China will achieve its full-year growth target of 7.5 per cent and "the rebound in the fourth quarter is likely to extend into next year," Jia said at the quarterly conference at the China Center for Economic Research, Peking University.
The median forecast in a Bloomberg news survey of 30 economists, which was published on October 24, is for China's economy to expand 7.7 per cent in the October-December period. Third-quarter growth eased to 7.4 per cent from a year earlier, the seventh straight deceleration.
At the same time, some monthly data showed signs of a pickup. Industrial production in September rose a more-than-estimated 9.2 per cent from a year earlier, retail sales climbed 14.2 per cent, the most since March, and fixed-asset investment excluding rural households for the first nine months of the year increased 20.5 per cent.
"For short-term growth prospects, there will be no big problem," Jia said. "China's pro-growth policies will continue to have effect."
China's budget deficit may also increase a little next year, "but there will be no significant increase," Jia said. While China may also issue more local government bonds in 2013, "overall local government debt risks are under control," he said.
Meanwhile, Chinese industrial companies' profits rose in September for the first time in six months, adding to signs economic growth is picking up following a seven-quarter slowdown.
Net income rose 7.8 per cent from a year earlier to 464.3 billion yuan ($74.3 billion), the National Bureau of Statistics said on Saturday in Beijing. That compared with a 6.2 per cent decline in August, the year's largest drop.
Today's report followed data showing industrial production and retail sales accelerated in September and a manufacturing gauge rose in October. Chinese Premier Wen Jiabao said the economy will keep showing "positive changes," according to a report last week by the official Xinhua news agency.
"As upstream commodity prices are falling, Chinese corporate profits have room to rise," Wang Tao, chief China economist at UBS AG in Hong Kong, said before today's report.
Huaneng Power International Inc., which develops and operates power plants across China, said October 24 that its third-quarter profit rose 757 per cent to two billion yuan.
Industrial companies' profits in the first nine months of the year declined 1.8 per cent to 3.5 trillion yuan, according to on Friday's statement. That compares with a 3.1 per cent drop in the first eight months and a 27 per cent gain in the same period in 2011. The government began reporting monthly year-over-year profit changes in October 2011.
The previous profit declines have weighed on stocks this year, with the benchmark Shanghai Composite Index down six per cent so far in 2012. The gauge dropped 1.7 per cent on Friday.
Revenue for industrial companies in the first nine months increased 10.2 per cent from a year earlier to 65.7 trillion yuan, the statistics bureau report showed. Sales rose 29.6 per cent in the January-September period of 2011.
Preventing any further slowdown is a chief challenge for the ruling Communist Party as it begins a once-a-decade leadership transition with a congress set to start on November 8 in Beijing, where Vice-President Xi Jinping will probably become head of the party.
At the annual session of the legislature in March, Xi is likely to succeed Hu Jintao as president and Vice Premier Li Keqiang may succeed Wen as premier.
China's foreign-exchange regulator said on Friday that the nation is not suffering from capital flight, even as growth in foreign reserves eased "significantly" in the third quarter.
The country's third-quarter current account surplus was $70.6 billion, bringing the nine-month surplus to $147.8 billion, the State Administration of Foreign Exchange said. Capital and financial accounts recorded a three-month deficit of $71 billion, bringing the nine-month gap to $85.4 billion, it said.
China's gross domestic product expanded 7.4 per cent from a year earlier in the July-September period, slowing from 7.6 per cent in the second quarter, according to government data. - Bloomberg
Industrial production in September rose a more-than-estimated 9.2 per cent from a year earlier.
China's factory-output growth will be faster this quarter than in the previous three months, helping the nation achieve its target for economic expansion in 2012, Zhu Hongren, chief engineer at the Ministry of Industry and Information Technology, said at an October 25 briefing.
The preliminary reading of a purchasing managers' index released on October 24 by HSBC Holdings Plc and Markit Economics was 49.1 for October, up from a final level of 47.9 for September. Readings below 50 indicate contraction.
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