China’s economy could grow more than 5.5% in 2021: Jefferies

China said Friday that its economy grew 6% in the third quarter. It is believed to be China’s slowest GDP growth in the past 27 and a half years..

Analysts polled by Reuters expected China’s GDP to grow 6.1% compared to the third quarter of 2018.

In the second quarter of 2019, the Chinese Bureau of Statistics said the economy grew 6.2% from last year as the country’s trade war with the United States played a role..

China’s GDP fell relative the first quarter of 2018, when it grew by 6.8%. This is due to the tightening of credit conditions and a trade dispute with the United States, says Vishnu Varathan, head of the department of economics and strategy of the Treasury of Asia and Oceania at Mizuho Bank.

«There is no doubt that the recession is serious», – said Varathan Friday, before China released its GDP report.

Beijing’s official growth target for 2019 is 6–6.5%.

Third-quarter growth was the slowest since the first quarter of 1992, Reuters reported. This is the earliest quarterly data on record..

Economists are pessimistic about China’s near-term outlook, although Friday September data showed some bright spots: retail sales rose 7.8% from a year earlier, and industrial output rose 5.8%. Fixed capital investment rose 5.4% from January to September.

«Despite a stronger September, pressure on economic activity should intensify in the coming months», – suggested Julian Evans-Pritchard, Sr. China Economist at Capital Economics.

«Cooling global demand will continue to put pressure on exports, financial constraints mean infrastructure spending will decrease in the near future, and the recent real estate boom looks set to weaken.», – he added.

China’s growth is likely to continue to slow in the next two quarters, said Bo Zhuang, chief Chinese economist at TS Lombard. This is because real growth in service production has slowed sharply in the past few months, Chuang told CNBC..

Zhuang expects China’s growth rate to slow to 5.8% in the fourth quarter, and the country’s annual growth target of 6.1%.

Chinese economy grows 6% in Q3 - less than expected

«Considering trade negotiations and conflict with the United States, the Chinese authorities admit lower growth rates», – said Chuang.

While Beijing’s official GDP figures are tracked as an indicator of the health status of the world’s second largest economy, many outside experts have long expressed skepticism about the credibility of China’s reports..

The latest data from China has not been optimistic, and analysts including Evans-Pritchard and Chuang expect stimulus measures to be rolled out soon..

China’s import and export data for September turned out to be worse than expected amid trade friction between the country and the US.

The two economic giants were embroiled in a trade war over a year ago, with each country imposing tariffs for goods worth billions of dollars.

The latest round of trade talks between the world’s two largest economies ended late last week in Washington. After the meeting, the United States said it would suspend the increase in duties on Chinese goods, which were supposed to take effect on Tuesday..

US President Donald Trump said China agreed to «very essential first phase of the transaction», which will be concluded within the next three weeks. Trump also said the deal would address intellectual property and financial services issues, as well as Chinese purchases of $ 40 billion to $ 50 billion of agricultural products..

Chinese economy grows 6% in Q3 - less than expected

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