The Chinese economy is still growing strongly, although it is doing so at a slower rate.
At the same time industrial production remains solid, retail sales are still doing well and urban investment is also chugging along.
Data released yesterday confirmed the economy grew at an annual 9.1% rate in the three months to September.
That was down on the 9.5% rate in the second quarter and the 9.7% rate in the March quarter.
China grew at an annual 10.4% last year (and 9.8% in the December quarter), so the growth rate in the latest quarter is noticeably slower than it was last year.
In fact it was the slowest growth for two years and naturally that spooked investors in Asian markets who sold off after the news was released, on top of the early weakness following more worries about European financial stability.
Markets in Europe mostly fell, but that stopped in the uS where shares finished higher. Oil rose, gold fell and the Aussie dollar ended above $US1.02.
Last month the IMF forecast China would grow at 9.5% this year (down from 9.6% in the forecast made earlier this year) and cut the 2012 growth rate to 9% from 9.5%.
If China is to reach an annual 9.5% rate for this year, it will have to grow faster at around 9.7% in the current quarter to reach that target.
Industrial production for September rose 13.8% year-on-year, accelerating from 13.5% in August and above forecasts of 13.3%.
That confirms the slower readings from the two monthly surveys of manufacturing activity over the past four months.
September retail sales rose 17.7%, well above a 17% forecast from the markets and fixed-asset investment in urban areas rose 24.9% in the January-September period, compared to a year earlier, which was also above market forecasts.
No sign in the data then of the impact of the credit crunch in small businesses across the country that saw a panicked government reveal measures last week to help the sector.
And no sign of why the government thought it necessary to make a public show of support at the start of last week for the country’s four biggest banks by revealing the domestic arm of the sovereign wealth fund was buying shares in the quartet.
That boosted bank stocks and the market and now looks like to have been linked to the help for small business, with all banks pledging to lift lending and follow the government’s edicts on reducing costs and easing the credit strains on this sector.
Trade data out last week showed Chinese export growth slowing, especially to the EU which is now its biggest market.
Import growth eased as prices fell and imports of key commodities such as iron ore and copper showed sharp (and surprising) increases last month.
Inflation eased a touch to an annual 6.1% rate but that is far above the 4% target rate of the government.
To try and control inflation (and property prices) and prevent them from stoking social unrest, the government has raised interest rates five times and banks’ reserve requirements nine times in the past year.
And that has lead to a widely reported credit crunch for many small and micro businesses, and for some larger groups, according to Chinese media reports.
September’s industrial production rose 1.2% from that of the previous month, according to the National Bureau of Statistics. Retail sales last month rose 1.7% from August.
But the growth in urban investment slowed a little and was 0.7 percentage points lower than that during the first six months of this year.
Chinese crude steel production fell 2 million tonnes or 4% to 56.7 million tonnes in September, the second lowest monthly total of the year so far.
It was still up 16.5% on a year ago, while the nine month total of 525.74 million tonnes was 10.7% ahead of the first nine months of 2010.
Production of cement and electricity was up 15.7% and 11.5% on a year earlier in September, but oil production was only up 1.5%.
Even though China is slowing, its annual growth rate is four times that of the US and around six to eight times that of different parts of Europe.
