China’s Economy to Pick up in Q4.doc

China?s Economy to Pick up in Q4 Weak internal and external demand has slowed down economic growth for the seventh straight quarter The preliminary accounting data from the National Statistics Bureau shows that China?s Gross Domestic Product (GDP) totaled USD 35.348 trillion during the first three quarters of this year, up 7.7% year-onyear based on comparable prices. The third quarter saw a GDP growth of 7.4%, another decline in seven consecutive quarters. Slowing economic growth is mainly attributed to the sluggish demand at home and abroad, which is reflected on the three forces driving China?s economic growth —export, consumption and investment. During the first three quarters, China?s export experienced an accumulative growth of 7.4%, 1.8 percentage points lower quarteron-quarter and 15.3 percentage points yearon-year; as for consumption, the domestic total retail sales of consumer goods increased by 14.1%, 0.3 percentage points lower than that in the second quarter and 2.9 percentage points lower year-on-year; in terms of investment, in the past three quarters, the domestic fixed asset investment grew 20.5%, with a slight 0.1 percentage points higher than that of the second quarter yet 4.4% lower year-on-year. Demand from the real economy has also been slashed, which is obviously reflected in industrial production. During the past three quarters, China merely registered a 10% growth in industrial added value, 0.5 percentage points lower than that in the second quarter and 4.2 percentage points lower than that in the same period of last year. Several factors contribute to the recovering economy In the third quarter, the economy is still slowing down, but at a much lower speed and the economy begins to stabilize. In addition, a string of economic operating data indicates that there exist several negative factors for the economy to pick up. First, the leading economic indicators are redounding. In September, although the official PMI 49.8% was sti