China's GDP growth in the third quarter reached a record 10.2 percent, according to a government think-tank report published last Friday by the State Information Center. This figure is roughly the same as the second quarter's level. The report predicted that the consumer price index (CPI), a key inflation barometer, rose by 6.6 percent in the third quarter.
The rising producer price index (PPI), which measures prices at the producer level and the impact on CPI pressure, might be a concern for some observers. However, even considering its influence, consumer prices are not expected to exceed the 8.7 percent peak, a 12-year high, for more than two months in the coming months and the first half of next year.
Post-disaster reconstruction in the affected areas will increase investment demand, with energy efficiency becoming a new focus. Fixed asset investment is expected to reach 4.77 trillion yuan (approximately 695.1 billion U.S. dollars) in the third quarter, representing a 27.6 percent increase over last year. This growth is more than 1.3 percentage points higher than in the first half.
The report stated that consumption would continue to be a major force driving the country’s economy. However, a retreat in car and home buying, particularly during the first half, had adverse effects on consumption in the third quarter. Retail sales nationwide are expected to reach 2.61 trillion yuan in the third quarter, with an increase of 20 percent. This growth will be 1.4 percentage points lower than the level in the first half.
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